Exhibit 10.1
EXECUTION COPY
ASSET PURCHASE AGREEMENT
among
FMC CORPORATION,
SOLUTIA INC.,
ASTARIS LLC,
ISRAEL CHEMICALS LIMITED
and
ICL PERFORMANCE PRODUCTS HOLDING INC.
dated as of
September 1, 2005
TABLE OF CONTENTS
Page
ARTICLE I PURCHASE AND SALE OF ACQUIRED ASSETS
1.1 Purchase and Sale of the Acquired Assets; Assumed
Liabilities; Retained Liabilities.....................1
1.2 Consideration...........................................7
1.3 The Closing.............................................8
1.4 Purchase Price Adjustment..............................11
1.5 Further Assurances.....................................15
1.6 Purchase Price Allocation..............................16
1.7 Consent of Third Parties...............................16
1.8 Removal of Excluded Assets.............................17
1.9 Pro Ration of Certain Items............................17
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE SELLER
2.1 The Seller, the Subsidiaries and Fosbrasil.............18
2.2 Authorization, Etc.....................................19
2.3 Financial Statements...................................19
2.4 No Approvals or Conflicts..............................21
2.5 Compliance with Law; Governmental Authorizations.......22
2.6 Litigation.............................................22
2.7 Title; Condition of Assets.............................23
2.8 Absence of Certain Changes.............................24
2.9 Tax Matters............................................26
2.10 Employee Benefits......................................26
2.11 Labor and Employment Matters...........................30
2.12 Intellectual Property..................................30
2.13 Contracts..............................................32
2.14 Environmental Matters..................................35
2.15 Insurance..............................................36
2.16 Real Property..........................................37
2.17 Product Liability......................................38
2.18 Inventory..............................................39
2.19 Accounts Receivable....................................39
2.20 Relationship with Customers and Suppliers..............39
2.21 Absence of Questionable Payments.......................39
2.22 Solvency...............................................40
2.23 All Assets.............................................40
2.24 No Brokers' or Other Fees..............................40
2.25 No Other Representations or Warranties.................40
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE OWNERS
3.1 Organization of the Owners.............................41
3.2 Authorization, Etc.....................................41
3.3 No Approvals or Conflicts..............................42
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3.4 Litigation.............................................43
3.5 No Brokers' or Other Fees..............................43
3.6 No Other Representations or Warranties.................43
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE BUYER AND ICL
4.1 Organization...........................................43
4.2 Authorization, Etc.....................................44
4.3 No Approvals or Conflicts..............................44
4.4 Financial Capacity.....................................45
4.5 Litigation.............................................45
4.6 No Brokers' or Other Fees..............................45
4.7 No Other Representations or Warranties.................45
ARTICLE V CONDITIONS TO SELLER'S AND OWNERS' OBLIGATIONS
5.1 Representations and Warranties.........................45
5.2 Performance............................................46
5.3 Officer's Certificate..................................46
5.4 Consents and Approvals.................................46
5.5 Bankruptcy Approvals...................................46
5.6 Injunctions............................................46
5.7 Documents..............................................47
5.8 Opinion of Buyer's and ICL's Counsel...................47
ARTICLE VI CONDITIONS TO THE BUYER'S AND ICL'S OBLIGATIONS
6.1 Representations and Warranties.........................47
6.2 Performance............................................47
6.3 Officer's Certificates.................................48
6.4 Consents and Approvals.................................48
6.5 Bankruptcy Approvals...................................48
6.6 Injunctions............................................48
6.7 Releases...............................................48
6.8 Permits................................................48
6.9 No Material Adverse Effect.............................49
6.10 Documents..............................................49
6.11 Opinion of Seller's and Owners' Counsel................49
ARTICLE VII COVENANTS AND AGREEMENTS
7.1 Conduct of Business by the Seller......................49
7.2 Access to Books and Records; Cooperation...............51
7.3 Filings and Consents...................................53
7.4 Tax Matters; Cooperation...............................54
7.5 Employee Matters.......................................55
7.6 Labor Matters..........................................57
7.7 Covenant to Satisfy Conditions.........................58
7.8 Contact With Customers and Suppliers...................58
7.9 Noncompetition; No Hire................................58
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7.10 Bankruptcy Filings, Covenants and Agreements...........60
7.11 Carteret ISRA Approval.................................62
7.12 Notice and Cure........................................62
7.13 Negotiations...........................................63
7.14 Monthly and Interim Financial Statements...............64
7.15 Use of Names and Logos.................................64
7.16 Resignation of Directors and Officers of Subsidiaries..65
7.17 Collection of Receivables..............................65
7.18 OPEB...................................................65
7.19 Cooperation............................................65
7.20 Real Property Matters..................................66
7.21 Bulk Transfer Laws.....................................66
7.22 Astaris Brasil.........................................67
7.23 Intellectual Property Matters..........................67
7.24 Monsanto Supply Agreement Matters......................67
ARTICLE VIII TERMINATION
8.1 Termination............................................69
8.2 Procedure and Effect of Termination....................70
ARTICLE IX INDEMNIFICATION
9.1 Indemnification........................................72
ARTICLE X MISCELLANEOUS
10.1 Fees and Expenses......................................84
10.2 Governing Law..........................................84
10.3 Amendment..............................................84
10.4 Assignment.............................................84
10.5 Waiver.................................................85
10.6 Notices................................................85
10.7 Complete Agreement; Successors and Assigns.............87
10.8 Counterparts...........................................87
10.9 Publicity..............................................87
10.10 Interpretive Provisions................................88
10.11 Disclosure Schedule...................................115
10.12 Headings; Table of Contents...........................116
10.13 Severability..........................................116
10.14 No Third Party Beneficiaries..........................117
10.15 CONSENT TO JURISDICTION; APPOINTMENT OF AGENT FOR
SERVICE OF PROCESS..................................117
10.16 WAIVER OF JURY TRIALS.................................117
10.17 Specific Enforcement; Cumulative Remedies.............118
10.18 Guarantee.............................................118
10.19 No Right of Setoff....................................119
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EXHIBITS
Exhibit A Form of Escrow Agreement
Exhibit B Form of ▇▇▇▇ of Sale
Exhibit C Form of Assignment of Contracts, Intellectual Property,
Permits and Warranties
Exhibit D Form of Transition Services Agreement
Exhibit E Form of Deed for Owned Real Property
Exhibit F Form of Assignments for Leased Real Property
Exhibit G Form of Carteret Agreement
Exhibit H Form of Assumption Agreement
Exhibit I Initial Relief Order, dated July 21, 2005
Exhibit J Form of Sauget Supply Agreement
Exhibit K Form of Opinion of ICL's and Buyer's Counsel
Exhibit L Form of Opinion of Seller's and Owners' Counsel
Exhibit M Forms of Assignment and Assumption Agreements
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement"), dated as of
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September 1, 2005, is entered into by and among Israel Chemicals Limited, an
Israeli corporation ("ICL"), ICL Performance Products Holding Inc., a Delaware
corporation and a wholly owned subsidiary of ICL (the "Buyer"), FMC
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Corporation, a Delaware corporation ("FMC"), Solutia Inc., a Delaware
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corporation ("Solutia" and, together with FMC, the "Owners") and Astaris
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LLC, a Delaware limited liability company ("Astaris" or the "Seller").
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WHEREAS, each of the Owners owns fifty percent (50%) of the Equity
Interests in Astaris;
WHEREAS, Astaris Brasil Ltda., a Brazil limited liability company
("Astaris Brasil"), Astaris Canada Ltd., a Canadian corporation ("Astaris
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Canada"), Astaris Europe S.r.l., an Italian limited liability company
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("Astaris Europe"), and Astaris International, Inc., a Delaware corporation
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("Astaris International"), are direct or indirect subsidiaries of Astaris;
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WHEREAS, Astaris International owns all of the Equity Interests of
Astaris Canada and five percent (5%) of the Equity Interests of Astaris
Europe;
WHEREAS, Solutia filed for relief under Chapter 11 of title 11 of the
United States Code (as amended, the "Bankruptcy Code") on December 17, 2003;
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WHEREAS, the Seller owns and operates the Business;
WHEREAS, the Seller wishes to sell (and the Owners wish the Seller to
sell) to the Buyer the Acquired Assets and to have the Buyer assume the
Assumed Liabilities, and the Buyer wishes to buy from the Seller the
Acquired Assets and assume the Assumed Liabilities, upon the terms and
subject to the conditions set forth in this Agreement; and
WHEREAS, on July 21, 2005, the Bankruptcy Court entered the Initial
Relief Order.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants contained herein, the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE OF ACQUIRED ASSETS
1.1 Purchase and Sale of the Acquired Assets; Assumed Liabilities;
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Retained Liabilities.
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(a) Subject to the terms and conditions of this Agreement, at
the Closing, the Seller shall sell, convey, transfer, assign and deliver to
the Buyer or, subject to Section 10.4 of this Agreement, ICL's designated
Affiliates or permitted assigns, and shall cause Astaris International to
sell, convey, transfer, assign and deliver to Buyer or, subject to Section
10.4 of this Agreement, ICL's designated Affiliates or permitted assigns,
and the Buyer or ICL's
designated Affiliates or permitted assigns shall purchase and accept from
the Seller and Astaris International, the Acquired Assets, free and clear of
all Encumbrances (other than Permitted Encumbrances), including all claims,
liens, and interests of Solutia and FMC or of any creditor or equity holder
of Solutia or FMC, respectively.
(b) Subject to the terms and conditions of this Agreement,
and except as otherwise specifically provided (x) in this Section 1.1(b),
(y) in respect of the Retained Liabilities (as set forth in Section 1.1(c))
or (z) in Section 1.9, at the Closing, the Buyer shall assume and agree to
pay, discharge, perform and otherwise satisfy, as the case may be, and the
Seller shall irrevocably convey, transfer and assign to the Buyer, the
following Liabilities, commitments and obligations of the Seller and the
Subsidiaries (other than Astaris International) and no others (the "Assumed
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Liabilities"):
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(i) all account, trade and other payables of the
Seller and the Subsidiaries (including bank overdrafts) as of the
Closing Date, but only if and to the extent that the same are reflected
in Net Working Capital in the Conclusive Net Working Capital and Capex
Statement;
(ii) all Liabilities due to Affiliates of the Seller
and the Subsidiaries as of the Closing Date, but only if and to the
extent that the same are related to the purchase of goods or services
and are reflected in Net Working Capital in the Conclusive Net Working
Capital and Capex Statement;
(iii) all Liabilities in respect of Taxes payable
for periods or portions thereof ending on or prior to the Closing Date,
but only if and to the extent that the same are reflected in Net
Working Capital in the Conclusive Net Working Capital and Capex
Statement;
(iv) all Liabilities in respect of commissions for
periods or portions thereof ending on or prior to the Closing Date, but
only if and to the extent that the same are reflected in Net Working
Capital in the Conclusive Net Working Capital and Capex Statement;
(v) all Taxes attributable to the ownership or
operation of the Acquired Assets for periods or portions thereof
beginning after the Closing Date;
(vi) the Buyer's share of personal property and
real property Taxes prorated under Section 1.9 and the Buyer's share of
any Transfer Taxes pursuant to Section 7.4(b);
(vii) subject to Sections 1.1(b)(xii) and 1.1(c)(xix)
hereof, all Liabilities and obligations of the Seller and the
Subsidiaries in respect of Contracts or Permits that are Acquired
Assets that accrue or are to be performed after the Closing Date,
except that the Buyer shall not assume or agree to pay, discharge or
perform any Liabilities or obligations arising out of any breach or
default (including for this purpose any event which, with notice or
lapse of time would constitute such a breach or default) by a Seller
Person of any provision of any such Contract or Permit, including
Liabilities or
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obligations arising out of a Seller Person's failure to perform any
Contract or comply with any Permit in accordance with its terms or
applicable Law on or prior to the Closing;
(viii) any Liability or obligation arising under
the Assumed Benefit Plans and Foreign Plans, to the extent (A) insured
under a third-party contract of insurance that is transferred to the
Buyer pursuant to this Agreement, (B) funded through a trust or
custodial account that is fully transferred to Buyer pursuant to this
Agreement, (C) reflected in Net Working Capital in the Conclusive Net
Working Capital and Capex Statement, including any bonuses or similar
payments to the extent reflected in Net Working Capital in the
Conclusive Net Working Capital and Capex Statement that may be due upon
or after consummation of the transactions contemplated by this
Agreement, (D) accrued or to be performed under any Assumed Benefit
Plan or Foreign Plan after the Closing Date, except that the Buyer
shall not assume or agree to pay, discharge or perform any Liabilities
or obligations that arise as a result of a Seller Person failing to
operate or administer such Assumed Benefit Plan or Foreign Plan prior
to the Closing in accordance with its terms or any applicable Law, or
(E) it is a severance benefit that becomes payable to any Employee as a
result of the transactions contemplated by this Agreement, but only to
the extent such severance benefit becomes due as a direct result of the
Buyer's failure to extend offers of employment to such Employees in
accordance with Section 7.5;
(ix) all accrued salary, wages, bonuses and
commissions as of the Closing Date for Transferred Employees and
Non-U.S. Employees, but only if and to the extent that the same are
reflected in Net Working Capital in the Conclusive Net Working Capital
and Capex Statement;
(x) any severance benefits arising under the
Employment Agreement, dated as of November 18, 2002, as amended by that
certain letter agreement dated December 10, 2004, by and between
Astaris and ▇▇▇▇ ▇. ▇▇▇▇▇, that becomes payable on or after the Closing
Date, but only if ▇▇▇▇ ▇. ▇▇▇▇▇ commences employment with the Buyer,
ICL or any of ICL's Covered Affiliates within two (2) years of the
Closing Date;
(xi) any Liabilities or obligations arising after
the Closing Date out of (A) any customer claims that are based upon any
express or implied representation, warranty, agreement or guarantee
made or alleged to have been made by the Seller or a Subsidiary in
connection with products or materials manufactured or processed prior
to the Closing that are sold by or on behalf of the Buyer after the
Closing or (B) any other customer claim for product returns in respect
of any product manufactured or processed prior to the Closing that is
sold by or on behalf of the Buyer after the Closing, but if and only to
the extent, in each case, such Liabilities or obligations (w) are
reflected in Net Working Capital in the Conclusive Net Working Capital
and Capex Statement, (x) are for any individual claim or group of
related claims of an amount less than two hundred thousand dollars
($200,000), (y) are for any individual claim or group of related claims
of an amount equal to or greater than two hundred thousand dollars
($200,000), not to exceed three million dollars ($3,000,000) in the
aggregate, or (z) result from the Buyer's failure to manage the
customers and accounts of the Business after the Closing with respect
to such claims, or make any settlement in respect thereof, in its good
faith
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reasonable judgment and consistent with the past practice in the
ordinary course of the Business prior to the Closing Date; and
(xii) up to an aggregate amount not to exceed twelve
million dollars ($12,000,000) (the "Monsanto Basket") of Additional
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Monsanto Supply Agreement Environmental Costs; provided that, in
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calculating whether such Monsanto Basket has been exceeded, the amount
of any Monsanto Supply Agreement Environmental Costs paid by the Seller
under the Monsanto Supply Agreement prior to the Closing shall not be
considered.
Nothing set forth in this Section 1.1(b) is intended or shall be construed
to derogate any of the representations or warranties set forth in Articles
II or III.
(c) The Buyer, ICL and the Subsidiaries shall not assume any
Liabilities, commitments or obligations (contingent or absolute and whether
or not determinable as of the Closing) of any Seller Person (including the
Liabilities and obligations of the Subsidiaries existing or arising prior to
the Closing), except for the Assumed Liabilities as specifically and
expressly provided for above, whether such Liabilities or obligations relate
to payment, performance or otherwise, and all Liabilities, commitments or
obligations not expressly transferred to the Buyer hereunder as Assumed
Liabilities (the "Retained Liabilities") shall be retained or assumed by the
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Seller, Astaris International, FMC or Solutia as provided in Section
10.10(d), who shall remain liable therefor. Without limitation to the
foregoing, all of the following shall be considered Retained Liabilities and
not Assumed Liabilities (except as specified below) for the purposes of this
Agreement (whether or not disclosed, referred to, accrued or reserved for on
the 2004 Balance Sheet, the Interim Balance Sheet or any Disclosure Schedule
or Exhibit hereto):
(i) other than any Assumed Liabilities under
Section 1.1(b)(xi), any Liabilities or obligations arising out of,
resulting from or relating to (A) any claim, regardless of when made or
asserted and whether founded upon negligence, strict liability in tort
or other similar legal theory, seeking compensation or recovery for or
relating to injury to person or damage to property to the extent
arising out of the conduct of the Business prior to the Closing, (B)
the PPA Litigation, (C) any product liability or similar claim for
injury to person or property, regardless of when made or asserted,
which arises out of or is based upon a theory of strict liability under
Section 402A of the Restatement (2nd) of Torts or any analogous or
similar provision of statutory or common law or any express or implied
representation, warranty, agreement or guarantee made by a Seller
Person, or alleged to have been made by any Seller Person, or which is
imposed or asserted to be imposed by operation of Law, to the extent
arising out of any service performed or the mining, treatment,
manufacture, sale or lease, as the case may be, of any product or
materials by or on behalf of any Seller Person prior to the Closing,
including any such claim relating to any product delivered in
connection with the performance of such service and any such claim
seeking recovery for consequential damages, lost revenue or income;
provided that such Liability or obligation for all claims under clauses
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(A) and (C) shall be retained by the applicable Seller Person
notwithstanding any duty to warn that may arise after the Closing with
respect to any product sold or service provided prior to the Closing if
the defect or other underlying cause of such claim or Liability existed
prior
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to the Closing, or (D) any customer claim for product returns in
respect of any product sold or distributed prior to the Closing;
(ii) other than Taxes that are Assumed Liabilities
under Section 1.1(b)(iii), all Taxes of the Seller Persons for periods
or portions thereof ending on or before the Closing Date, including any
Taxes of any other Person for which any Seller Person may be liable (A)
as a member of a consolidated, combined or unitary group of entities
pursuant to Treas. Reg. Section 1.1502-6 or analogous provision of
state, local or foreign Tax law, (B) as a successor to such other
Person by merger, liquidation or other similar transaction, and (C) as
a result of any tax sharing, indemnification or similar agreement
entered into by any such Seller Person at any time prior to the
Closing;
(iii) other than Taxes that are Assumed Liabilities
under Section 1.1(b)(vi), the Seller's share of personal property and
real property Taxes prorated under Section 1.9 and the Seller's share
of any Transfer Taxes pursuant to Section 7.4(b);
(iv) any Liability (other than any Liability for
Taxes) under applicable bulk transfer Laws, or similar statutes, Laws
or regulations, including creditor related Laws, arising as a result of
the transactions contemplated by this Agreement;
(v) other than any Assumed Liabilities under
Sections 1.1(b)(viii), (ix) or (x), any Liability or obligation with
respect to employment, termination of employment, compensation,
severance, retention or employee benefits of any nature owed to any
employees, former employees, agents or independent contractors of any
Seller Person, whether or not employed by the Buyer after the Closing,
including any Liability or Obligation that (A) arises out of or relates
to the employment or service provider relationship between such Seller
Person and any such individuals, including any claims, liabilities or
obligations that arise under any Law governing equal employment
opportunity and discrimination in employment, occupational safety and
health, the payment of wages and other compensation, the provision of
workers' compensation benefits and the maintenance of insurance for
such benefits, and/or other terms and conditions of employment, (B)
arises out of or relates to any Benefit Plan that is not an Assumed
Benefit Plan or (C) arises out of or relates to events or conditions
occurring on or before the Closing Date, including any bonuses or
similar payments that may be payable to such individuals upon
consummation of the transactions contemplated by this Agreement or
otherwise;
(vi) any claims, Liabilities or obligations of
any Seller Person arising out of or relating to the Excluded Assets,
including the Excluded Contracts;
(vii) the OPEB Obligations;
(viii) the Excluded Master Lease Obligations;
(ix) the Outstanding Guarantees;
(x) any Liability or obligation for any bank or
other funded debt of any Seller Person, including the loans, notes and
indebtedness, obligations and
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liabilities of such Persons in respect of the Credit Agreement or the
Solutia DIP Financing Agreement.
(xi) the Retained Environmental Liabilities;
(xii) any Liability or obligation of any Seller
Person, arising or incurred in connection with the negotiation,
preparation and execution of this Agreement and the transactions
contemplated hereby, including any fees and expenses (including any
fees, costs or expenses of counsel, accountants, brokers, finders and
other experts);
(xiii) any Liability or obligation of any Seller
Person existing under this Agreement or the other Transaction
Documents;
(xiv) any Liability or obligation of any Seller
Person (except for trade accounts payable and Liabilities due to
Affiliates included within the Assumed Liabilities under Sections
1.1(b)(i) or (ii)), to any other Seller Person, including any
intercompany payables or receivable credits specified in the 2004
Balance Sheet (the "Intercompany Payables");
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(xv) any Liability or obligation created by any
by-law, certificate of incorporation or limited liability company
agreement provision or other agreement, to the extent arising prior to
the Closing in the case of the Subsidiaries, and relating to the
indemnification of any Person who was an employee, officer, director,
member or manager of any of the Seller Persons prior to the Closing
Date;
(xvi) any claims, Liabilities or obligations to
the extent arising out of or relating to any agreement or instrument
(other than this Agreement or any other Transaction Document) related
to the formation of Astaris or the Subsidiaries or the disposition of
any of their rights, assets or properties, including the Joint Venture
Agreement, the Astaris LLC Agreement, the Solutia Asset Transfer
Agreement, the FMC Asset Transfer Agreement, the Prayon Agreement and
the Agrium Agreement (including any take or pay arrangements with
Agrium) or any other contract relating to the formation of the Astaris
joint venture or any transfer or other disposition of assets related to
the Business, including any liquidation or restructuring of the Seller
after the Closing;
(xvii) any claims, Liabilities or obligations arising
out of or attributable to the spinoff of Solutia from Old Monsanto in
1997;
(xviii) any Liability or obligation arising out of
or under or relating to any Non-Assumed Undisclosed Material Contract,
other than any Liability or obligation attributable to any breach of
any such Non-Assumed Undisclosed Material Contract by the Buyer after
the time the Buyer has actual knowledge of the existence of such
Non-Assumed Undisclosed Material Contract;
(xix) other than the Assumed Liabilities under
Section 1.1(b)(xii) hereof, all Additional Monsanto Supply Agreement
Environmental Costs; and
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(xx) any other Liability of any Seller Person
whatsoever, except for the Assumed Liabilities as specifically and
expressly set forth herein, including any Liability arising out of or
relating to the ownership or operation of the Seller, the Subsidiaries,
the Acquired Assets and the Business on or prior to the Closing Date
(including any predecessor operations and any discontinued operations),
including any claims, obligations or litigation arising out of or
relating to events or conditions occurring on or before the Closing
Date (including the litigation involving the PPA Technology, the
Solutia bankruptcy proceedings or any other threatened or pending
litigation or charges set forth on Section 2.6 or 2.11 of the
Disclosure Schedule).
(d) The obligations of the Buyer in respect of the Assumed
Liabilities and the obligations of the Seller, Astaris International, FMC or
Solutia in respect of the Retained Liabilities set forth in this Section 1.1
are in addition to the other obligations of the Buyer or the Seller Persons
or their respective Affiliates, as the case may be, otherwise set forth in
this Agreement or the Transaction Documents.
1.2 Consideration.
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(a) At the Closing, subject to the terms and conditions set
forth in this Agreement, the Buyer will (i) pay, in accordance with and to
the Persons specified in Section 1.2(b), cash in the amount of two hundred
fifty-five million dollars ($255,000,000) minus (A) the Estimated Capex
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Shortfall Amount, if any, plus (B) the Estimated Net Working Capital Excess
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Amount, if any, or minus (C) the Estimated Net Working Capital Deficiency
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Amount, if any, each as determined pursuant to Section 1.4(a)(ii), (the
"Initial Purchase Price" and, as the same may be adjusted pursuant to the
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provisions of this Agreement, the "Purchase Price") and (ii) assume the
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Assumed Liabilities.
(b) At the Closing, the Initial Purchase Price shall be paid
by the Buyer as follows:
(i) an amount equal to the Working Capital Escrow
Amount shall be delivered by wire transfer of immediately available
funds to The Bank of New York, or such other banking institution
mutually acceptable to the parties, as escrow agent (the "Escrow
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Agent"), to be held in an interest bearing escrow account (the "Working
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Capital and Capex Escrow Account") and disbursed pursuant to the terms
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hereof and of the Escrow Agreement in the form attached as Exhibit A
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hereto or other form required by the Escrow Agent (the "Escrow
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Agreement") as provided in Section 1.4(d);
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(ii) an amount equal to twelve million five hundred
thousand dollars ($12,500,000) (the "General Escrow Amount") shall be
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delivered by wire transfer of immediately available funds to the Escrow
Agent to be held in an interest bearing escrow account (the "General
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Escrow Account") to secure Solutia's indemnification obligations
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pursuant to Article IX, and disbursed pursuant to the terms hereof and
of the Escrow Agreement; and
(iii) the remainder of the Initial Purchase Price
shall be delivered to the Seller in immediately available funds by wire
transfer to an account designated by
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the Seller by notice to the Buyer not less than two (2) Business Days
prior to the Closing Date.
1.3 The Closing.
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(a) Closing. Unless this Agreement shall have been terminated
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and the transactions contemplated herein shall have been abandoned pursuant
to Article VIII, the closing of the sale and transfer to the Buyer of the
Acquired Assets and the assumption of the Assumed Liabilities contemplated
by this Agreement (the "Closing") shall take place at the offices of Dechert
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LLP, ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, on the fifth (5th)
Business Day after the day upon which all of the conditions set forth in
Articles V and VI hereof are satisfied or waived in accordance with the
terms of this Agreement (other than those conditions that are to be
satisfied at the Closing) (the "Closing Date"), or at such other place and
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time as may be agreed upon in writing by Astaris and the Buyer, and shall be
effective as of the Effective Time.
(b) Deliveries to the Buyer. At the Closing, the Seller or the
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applicable Owner, as indicated, shall deliver or cause to be delivered to or
for the benefit of the Buyer, in the case of documents, duly executed by
each applicable party, the following:
(i) a ▇▇▇▇ of sale and instrument of assignment
to the Acquired Assets (other than Real Property, the transfer of which
will be effected in accordance with subclause (v) below), duly executed
by the Seller, substantially in the form of Exhibit B hereto;
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(ii) (A) assignments of all transferable or
assignable Contracts, Seller Intellectual Property, Permits (including
Environmental Permits and pending applications therefor), and
warranties relating to the Acquired Assets, each duly executed and,
where reasonably requested by the Buyer, in recordable form
substantially in the form of Exhibit C hereto, provided that, at and
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following the Closing, Seller shall also execute or cause to be
executed any additional assignment forms furnished by Buyer and
reasonably necessary for Buyer to record the assignment of Seller
Intellectual Property registered, issued, or pending in other
jurisdictions with the appropriate intellectual property offices or
Governmental Authorities, (B) the Assignment and Assumption Agreements
with respect to the rail car leases, duly executed by the Seller,
substantially in the forms of Exhibit M hereto and (C) an assignment
---------
and assumption agreement with respect to the supply of phosphoric acid
to Solutia under the Master Supply Agreement dated as of April 1, 2000,
by and among FMC, Solutia and Astaris that is in form and substance
reasonably satisfactory to the Buyer, the Seller and Solutia, duly
executed by the parties thereto;
(iii) the Transition Services Agreement, duly
executed by the Seller and each of the Owners, substantially in the
form attached hereto as Exhibit D;
---------
8
(iv) title certificates to any motor vehicles
included in the Acquired Assets, duly executed by the Seller (together
with any other transfer forms necessary to transfer title to such
vehicles);
(v) deed for transfer of the Owned Real Property
in the form attached hereto as Exhibit E in recordable form, conveying
---------
insurable fee simple title to the Owned Real Property, free and clear
of all Encumbrances except Permitted Encumbrances;
(vi) assignments for all Leased Real Property
Leases duly executed and acknowledged by the Seller and in recordable
form, each substantially in the form of Exhibit F hereto;
---------
(vii) such affidavits of title or other
certifications as shall be reasonably required by the Title Company to
insure the Buyer's title to the Real Property as set forth in Section
7.20, and to provide affirmative endorsements for no mechanics' liens;
(viii) copies of the Initial Relief Order and the
Approval Order as certified by the clerk or other appropriate
representative of the Bankruptcy Court;
(ix) Estoppel Certificates from landlords with
respect to the Leased Real Property, to the extent the landlord is
required to furnish an Estoppel Certificate under the Lease or such
certificate is otherwise obtained;
(x) subordination, non-disturbance and attornment
agreements and recognition agreements from mortgagees and prime
landlords holding Encumbrances on Owned Real Property or Leased Real
Property included in the Acquired Assets;
(xi) an acknowledgement from the Seller of receipt
of the Initial Purchase Price;
(xii) the Carteret Agreement, substantially in the
form attached as Exhibit G, duly executed by the parties thereto;
---------
(xiii) copies of the resolutions of the board of
directors of each Owner and the Seller authorizing and approving this
Agreement and the Transaction Documents to which such Owner or the
Seller is a party and the transactions contemplated hereby and thereby,
certified by the respective corporate secretary of such Owner or the
Seller to be true and complete and in full force and effect and
unmodified as of the Closing Date;
(xiv) evidence of the release of the Encumbrances
on the Acquired Assets listed in Section 1.3(b)(xiv) of the Disclosure
Schedule;
9
(xv) the Consents listed in Section 6.4 of the
Disclosure Schedule;
(xvi) the certificate required by Section 6.3 hereof;
(xvii) a certificate, in form and substance required
under Section 1445 of the Code and the Treasury Regulations thereunder,
stating under penalties of perjury that Astaris is not a foreign
person;
(xviii) the Escrow Agreement and Sauget Supply
Agreement;
(xix) such other Transaction Documents to which
the Seller or such Owner is a party;
(xx) certificates (or local equivalent) representing
all of the Equity Interests of Astaris Brasil, Astaris Canada and
Astaris Europe and 44.25% of Fosbrasil (in each case to the extent such
Equity Interests are certificated or there is a local equivalent in
use), duly endorsed in blank or with duly executed stock powers
attached, in proper form for transfer and with required transfer
stamps, if any, affixed;
(xxi) all such other instruments of conveyance as
shall be necessary to vest in the Buyer good, valid, marketable (as to
the Real Property) and insurable title to the Acquired Assets in
accordance with Section 1.1 hereof; and
(xxii) such other documents and certificates required
to be delivered by the Seller or the Owners pursuant to the terms of
this Agreement.
(c) Deliveries to the Seller and Owners. At the Closing, the
-----------------------------------
Buyer or ICL, as indicated, shall deliver or cause to be delivered to or for
the benefit of the Seller, in the case of documents, duly executed, the
following:
(i) the Initial Purchase Price in cash by wire
transfer of immediately available funds in accordance with, and to the
accounts designated pursuant to, Section 1.2(b);
(ii) (A) an assumption agreement, substantially
in the form of Exhibit H hereto, (B) the Assignment and Assumption
---------
Agreements with respect to the rail car leases, duly executed by the
Buyer, substantially in the forms of Exhibit M hereto and (C) an
---------
assignment and assumption agreement with respect to the supply of
phosphoric acid to Solutia under the Master Supply Agreement dated as
of April 1, 2000, by and among FMC, Solutia and Astaris that is in form
and substance reasonably satisfactory to the Buyer, the Seller and
Solutia, duly executed by the parties thereto;
10
(iii) copies of the resolutions of the board of
directors (or comparable governing body) of the Buyer and ICL, and any
of ICL's designated Affiliates or permitted assigns, as applicable
pursuant to Section 10.4, authorizing and approving this Agreement and
the Transaction Documents and the transactions and agreements
contemplated hereby and thereby, certified by the corporate secretary
(or local equivalent) of the Buyer to be true and complete and in full
force and effect and unmodified as of the Closing Date;
(iv) the Escrow Agreement and Sauget Supply
Agreement;
(v) the other Transaction Documents to which the
Buyer or ICL is a party;
(vi) the certificate required by Section 5.3 hereof;
(vii) all such other instruments of conveyance as
shall be necessary for the assumption of the Assumed Liabilities by the
Buyer in accordance with Section 1.1(b) hereof; and
(viii) such other documents and certificates required
to be delivered by the Buyer pursuant to the terms of this Agreement.
(d) All instruments and documents executed and delivered to the
Buyer pursuant hereto shall be in form and substance, and shall be executed
in a manner, reasonably satisfactory to the Buyer. All instruments and
documents executed and delivered to the Seller or the Owners pursuant hereto
shall be in form and substance, and shall be executed in a manner,
reasonably satisfactory to the Seller or the Owners.
1.4 Purchase Price Adjustment.
-------------------------
(a) (i) For the purpose of determining the Initial Purchase
Price, at least ten (10) Business Days prior to the Closing Date the Seller
shall cause to be prepared and delivered to the Buyer a statement (the
"Estimated Closing Statement") setting forth a good faith estimate of the
---------------------------
Capex Shortfall Amount (the "Estimated Capex Shortfall Amount") and the Net
--------------------------------
Working Capital (the "Estimated Net Working Capital"), and the components
-----------------------------
and calculation thereof, as of the Effective Time, determined in accordance
with this Section 1.4 and the Applicable Accounting Principles. The
Estimated Closing Statement shall be subject to the review and agreement of
the Buyer, and the Buyer and the Seller shall cooperate and negotiate in
good faith to resolve any dispute regarding the Estimated Closing Statement
prior to the Closing; provided that if any item of dispute regarding the
--------
Estimated Closing Statement is not resolved by agreement in writing between
the Buyer and the Seller by the second (2nd) Business Day prior to the
Closing, then the Seller's estimate of such disputed item, together with the
resolved disputed items, shall be deemed final solely for purposes of
determining the Estimated Capex Shortfall Amount and the Estimated Net
Working Capital, absent manifest error. The Seller shall cooperate with and
provide Buyer and its representatives and accountants reasonable access to
books, records, accountants' work papers, employees, accountants and
advisors of the Seller and
11
the Subsidiaries and, to the extent in their possession or accessible by
them, Fosbrasil, in connection with Buyer's review of the Estimated Closing
Statement.
(ii) To the extent that the Estimated Net Working
Capital is greater than ($58,000,000) (such difference, the "Estimated
---------
Net Working Capital Excess Amount"), the Initial Purchase Price shall
---------------------------------
be increased by the amount of the Estimated Net Working Capital Excess
Amount as provided in Section 1.2(a)(i)(A). To the extent that the
Estimated Net Working Capital is less than ($58,000,000) (such
difference, the "Estimated Net Working Capital Deficiency Amount"), the
-----------------------------------------------
Initial Purchase Price shall be reduced by the amount of the Estimated
Net Working Capital Deficiency Amount as provided in Section
1.2(a)(i)(B).
(iii) The Initial Purchase Price shall be reduced
by the amount of the Estimated Capex Shortfall Amount.
(b) Within ninety (90) calendar days after the Closing Date,
the Buyer shall cause to be prepared and delivered to the Seller a statement
(the "Net Working Capital and Capex Statement") setting forth in good faith
---------------------------------------
the Estimated Capex Shortfall Amount and the Net Working Capital, and the
components and calculation thereof, as of the Effective Time, determined in
accordance with this Section 1.4 and the Applicable Accounting Principles.
The Inventory balance included in the Acquired Assets as of the Closing Date
will be determined based on a physical count of the Inventory included in
the Acquired Assets as of the Closing Date by Buyer and the Seller and
Buyer's and Seller's accountants, in accordance with the customary practices
for the taking of a physical inventory. The physically counted Inventory
items will be valued at the lower of standard cost or market (or as
otherwise provided in Section 2.18(a) of the Disclosure Schedule) with the
cost being determined on a first-in, first-out basis, in accordance with the
Applicable Accounting Principles. Net Working Capital shall not include any
Retained Liabilities or the value of any Excluded Assets, or reflect any
items prorated pursuant to Section 1.9. For purposes hereof, the term
"Applicable Accounting Principles" means GAAP applied in a manner consistent
--------------------------------
with the way the 2004 Balance Sheet was prepared (including preparation on a
"going concern" basis without reflecting the transactions contemplated under
this Agreement), with only the deviations or changes in GAAP or the
consistency of their application as are referred to in Section 1.4(b) of the
Disclosure Schedule.
(c) (i) After receipt of the Net Working Capital and Capex
Statement the Seller will have thirty (30) calendar days to review the Net
Working Capital and Capex Statement. The Buyer shall cooperate with and
provide Seller and its representatives and accountants reasonable access to
the books, records, accountants' work papers, employees, accountants and
advisors of the Buyer and, to the extent in their possession or accessible
by them, Fosbrasil, in connection with the Seller's review of the Net
Working Capital and Capex Statement during the thirty (30) calendar day
period following delivery of the Net Working Capital and Capex Statement to
the Seller. Unless the Seller delivers written notice to the Buyer setting
forth the specific items disputed by the Seller on or prior to the thirtieth
(30th) calendar day after the Seller's receipt of the Net Working Capital
and Capex Statement, the Seller will be deemed to have accepted and agreed
to the Net Working Capital and Capex Statement and such statement (and the
calculations contained therein) will be final, binding and conclusive. If
the Seller notifies the Buyer of Seller's objections to specific items
contained in the Net Working Capital and Capex
12
Statement (or specific calculations contained therein) within such thirty
(30) day period, the Seller and the Buyer shall, within thirty (30) calendar
days following delivery of such notice by the Seller to the Buyer (the
"Resolution Period"), attempt in good faith to resolve their differences
-----------------
with respect to the disputed items (or calculations) specified in the notice
(the "Disputed Items"), and all other (i.e., the undisputed) items (and all
-------------- ----
calculations relating thereto) will be final, binding and conclusive. Any
resolution by the Seller and the Buyer during the Resolution Period as to
any Disputed Items shall be set forth in writing and will be final, binding
and conclusive on the parties hereto.
(ii) If the Buyer and the Seller do not resolve
all Disputed Items by the end of the Resolution Period, then all
Disputed Items remaining in dispute will be submitted within thirty
(30) calendar days after the expiration of the Resolution Period to
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP or such other national independent accounting firm
mutually acceptable to the Buyer and each Owner (the "Neutral
-------
Arbitrator"). The Neutral Arbitrator shall act as an arbitrator to
----------
determine only those Disputed Items remaining in dispute, consistent
with this Section 1.4, and shall request a statement from the Buyer and
the Seller regarding such Disputed Items. In resolving such Disputed
Items, the Neutral Arbitrator may not assign a value to any Disputed
Item greater than the greatest value for such Disputed Item claimed by
any party or less than the lowest value for such Disputed Item claimed
by any party. All fees and expenses relating to the work, if any, to be
performed by the Neutral Arbitrator will be allocated between the Buyer
and the Seller in the same proportion that the aggregate amount of the
Disputed Items so submitted to the Neutral Arbitrator that is
unsuccessfully disputed by each such party (as finally determined by
the Neutral Arbitrator) bears to the total amount of such Disputed
Items so submitted. In addition, the Buyer and the Seller shall give
the Neutral Arbitrator access to all documents, books, records,
accountants' work papers, facilities and personnel of such party and
its subsidiaries and, as the case may be, to the extent in such party's
or parties' possession or accessible by such party or parties,
Fosbrasil, as reasonably necessary to perform its function as
arbitrator. If either the Buyer or the Seller fails to submit a
statement regarding any Disputed Item submitted to the Neutral
Arbitrator within the time determined by the Neutral Arbitrator or
otherwise fails to give the Neutral Arbitrator access as reasonably
requested, then the Neutral Arbitrator shall render a decision based
solely on the evidence timely submitted and the access afforded to the
Neutral Arbitrator by the Buyer and the Seller. The Neutral Arbitrator
will deliver to the Buyer and the Seller a written determination (such
determination to include a work sheet setting forth all material
calculations used in arriving at such determination and to be based
solely on information provided to the Neutral Arbitrator by the Seller
and the Buyer) of the Disputed Items submitted to the Neutral
Arbitrator within thirty (30) calendar days of receipt of such Disputed
Items, which determination will be final, binding and conclusive and
judgment may be entered on the award. The final, binding and conclusive
Net Working Capital and Capex Statement based either upon agreement or
deemed agreement by the Buyer and the Seller or the written
determination delivered by the Neutral Arbitrator in accordance with
this Section 1.4, will be the "Conclusive Net Working Capital and Capex
----------------------------------------
Statement."
---------
13
(d) On the fifth (5th) Business Day following the date on which
the Buyer and the Seller agree or are deemed to have agreed to, or the
Neutral Arbitrator delivers, the Conclusive Net Working Capital and Capex
Statement (the "Conclusive Net Working Capital and Capex Settlement Date"),
--------------------------------------------------------
the following payments and instructions shall be made or given:
(i) If the final Capex Shortfall Amount is less
than the Estimated Capex Shortfall Amount, the Buyer shall pay to
Seller an amount in cash equal to such difference, and if the final
Capex Shortfall amount is greater than the Estimated Capex Shortfall
Amount, Seller shall pay to Buyer an amount in cash equal to such
difference, in either case as an adjustment to the Purchase Price, and
the Buyer and the Seller shall, and the Owners shall cause the Seller
to, deliver to the Escrow Agent a joint written instruction directing
the Escrow Agent to pay to the Buyer or the Seller, as the case may be,
funds in the Working Capital and Capex Escrow Account sufficient to
satisfy such payment obligation;
(ii) If the amount of Net Working Capital on the
Conclusive Net Working Capital and Capex Statement is less than the
amount of the Estimated Net Working Capital (such difference, the
"Final Net Working Capital Deficiency Amount") by one hundred thousand
-------------------------------------------
dollars ($100,000) or more, the Seller shall, and the Owners shall
cause the Seller to, pay to the Buyer, as an adjustment to the Purchase
Price, an amount in cash equal to the Final Net Working Capital
Deficiency Amount as follows:
(A) if the Final Net Working Capital
Deficiency Amount is equal to or greater than the amount of the
funds remaining in the Working Capital and Capex Escrow Account
after deducting any payment made under clause (i) above (the
"Working Capital Escrow Balance"), then (1) the Buyer and the
Seller shall, and the Owners shall cause the Seller to, deliver
to the Escrow Agent a joint written instruction directing the
Escrow Agent to pay to the Buyer all of the funds remaining in
the Working Capital and Capex Escrow Account and (2) the Seller
shall, and the Owners shall cause the Seller to, pay to the
Buyer an amount in cash equal to the amount, if any, by which
the Final Net Working Capital Deficiency Amount exceeds the
Working Capital Escrow Balance (such excess to be calculated
without including in the calculation the amount of any interest
accrued on the funds in the Working Capital and Capex Escrow
Account); or
(B) if the Final Net Working Capital Deficiency
Amount is less than the Working Capital Escrow Balance, then
the Buyer and Seller shall, and the Owners shall cause the
Seller to, deliver to the Escrow Agent a joint written
instruction directing the Escrow Agent to (1) pay to the
Buyer the Final Net Working Capital Deficiency Amount
(together with any interest accrued thereon) and (2) pay to
the Seller any funds remaining in the Working Capital and
Capex Escrow Account after deducting the payment pursuant to
the immediately preceding clause (1).
14
(iii) If the amount of Net Working Capital on the
Conclusive Net Working Capital and Capex Statement is greater than the
amount of Estimated Net Working Capital (such difference, the "Final
-----
Net Working Capital Excess Amount") by one hundred thousand dollars
---------------------------------
($100,000) or more, the Buyer shall pay to the Seller, as an adjustment
to the Purchase Price, an amount in cash equal to the Final Net Working
Capital Excess Amount and the Buyer and Seller shall, and the Owners
shall cause the Seller to, deliver to the Escrow Agent a joint written
instruction directing the Escrow Agent to pay to the Seller the Working
Capital Escrow Balance.
(iv) If the amount of Net Working Capital on the
Conclusive Net Working Capital and Capex Statement is not at least one
hundred thousand dollars ($100,000) greater than or less than the
amount of Estimated Net Working Capital, no adjustment shall be made to
the Purchase Price and the Buyer and Seller shall, and the Owners shall
cause the Seller to, deliver to the Escrow Agent a joint written
instruction directing the Escrow Agent to pay to the Seller all of the
Working Capital Escrow Balance.
(v) Notwithstanding anything herein to the
contrary, if, prior to the Conclusive Net Working Capital and Capex
Settlement Date, the maximum net amount of the outstanding Disputed
Items in the aggregate (the "Maximum Disputed Amount") is less than the
-----------------------
amount of the funds in the Working Capital and Capex Escrow Account
(taking into account interest that would be accrued on such amount),
then, within ten (10) Business Days' following the request of Astaris
or the Buyer, the payments and instructions described in Sections
1.4(d)(i) through (iv) shall be made and given as if the Conclusive Net
Working Capital and Capex Settlement Date had occurred and as if the
references to "Conclusive Net Working Capital and Capex Statement" in
such Sections referred to the Capex Shortfall Amount and Net Working
Capital as set forth on the Net Working Capital and Capex Statement
excluding the Disputed Items; provided that an amount equal to the
--------
Maximum Disputed Amount (together with an amount of interest that would
be accrued on such amount) shall be retained in the Working Capital and
Capex Escrow Account until the fifth (5th) Business Day after final
resolution of the Disputed Items, at which time the net amount of the
Disputed Items due to the Buyer (together with interest accrued
thereon), if any, shall be paid to the Buyer out of the Working Capital
and Capex Escrow Account and the balance, if any, of the funds in the
Working Capital and Capex Escrow Account shall be paid to the Seller.
(vi) Notwithstanding anything to the contrary in
this Section 1.4, Seller shall not be liable for any of, and each Owner
shall be severally liable for fifty percent (50%) of, any payments due
to the Buyer pursuant to this Section 1.4(d).
1.5 Further Assurances.
------------------
After the Closing, each party hereto shall from time to time, at the
request of another party and at such requesting party's sole cost and
expense, execute and deliver such other instruments of conveyance and
transfer and take such other actions as such other party may reasonably
request in order to more effectively consummate the transactions
contemplated hereby and to vest in the Buyer good and valid title to the
Acquired Assets or provide for the
15
assumption by the Buyer of the Assumed Liabilities or by the Seller, Astaris
International, FMC or Solutia, as applicable, of the Retained Liabilities.
1.6 Purchase Price Allocation.
-------------------------
(a) The Purchase Price shall be allocated among the Acquired
Assets in accordance with the principles set forth in Section 1.6 of the
Disclosure Schedule, which principles shall be consistent with the rules
under Section 1060 of the Code and the Treasury Regulations promulgated
thereunder. The parties agree to act in accordance with the computations and
allocations as determined pursuant to this Section 1.6 in any relevant Tax
Returns or filings, including any forms or reports required to be filed
pursuant to Section 1060 of the Code, the Treasury Regulations promulgated
thereunder or any provisions of local, state and foreign law, and to
cooperate in the preparation of any such forms and to file such forms in the
manner required by applicable Law.
(b) The Buyer shall provide the Seller and the Owners with
a copy of the Buyer's proposed Purchase Price allocation as promptly as
reasonably practicable, but in no event later than sixty (60) calendar days
after the Closing Date, which allocation shall be subject to the Seller's
and Owners' review and approval. In the event that the Buyer, the Seller and
the Owners are unable to agree on the allocation within forty-five (45)
calendar days of the date on which the Buyer provides the Seller and the
Owners with a copy of the allocation, such dispute will be referred to an
internationally recognized firm of independent public accountants mutually
agreed upon by the parties, and the determination of such firm shall be
final and binding upon the parties.
1.7 Consent of Third Parties.
------------------------
(a) On the Closing Date, the Seller shall assign to the Buyer,
and the Buyer shall assume, the Contracts and the Permits (including the
Environmental Permits and pending applications therefor) which are to be
transferred to the Buyer as provided in this Agreement by means of an
assignment and assumption agreement substantially in the form of Exhibit C.
---------
To the extent that the assignment of all or any portion of any Contract or
Permit (including any pending application therefor) shall require the
consent of the other party thereto or any other third party, this Agreement
shall not constitute an agreement to assign any such Contract or Permit (or
pending application therefor) if an attempted assignment without any such
consent would constitute a breach or violation thereof (provided that the
--------
Seller and each of the Owners agrees to, and agrees to cause their
respective subsidiaries to, consent to the assignment to the Buyer of any
such Contract or Permit (including any pending application therefor) to the
extent that such consent is required for such assignment). However, the
Seller and each of the Owners agrees that on and after the Closing, it will,
at the request and under the reasonable direction of the Buyer, in the name
of the Seller, such Owner or otherwise as the Buyer shall specify, at the
sole cost and expense of the Seller, use its commercially reasonable efforts
(including appointing the Buyer as attorney-in-fact for the Seller or such
Owner to proceed at the Buyer's sole cost and expense) to do or cause to be
done all such things as shall be necessary and proper (a) to assure that the
rights of the Seller under such Contracts and Permits (including any pending
application therefor) shall be preserved for the benefit of the Buyer
(including any extension or renewal of any such Contract or Permit) and (b)
to facilitate receipt of the consideration to be received by the Seller in
and under every such Contract and Permit (including any pending application
therefor), which
16
consideration shall be held for the benefit of, and shall be delivered to,
the Buyer. Nothing in this Section 1.7 shall in any way diminish any
obligation of any Seller or either Owner under this Agreement to obtain all
consents and approvals and to take all such other actions prior to or at
Closing as are necessary to enable the Seller to convey or assign good and
valid title free and clear of Encumbrances (other than Permitted
Encumbrances) to all the Acquired Assets to the Buyer or shall otherwise
affect the obligations of Seller, Owners or Buyer under Section 7.7 hereof,
respectively.
(b) To the extent that the Permits necessary for the Buyer's
operation of the Business as conducted as of the Closing Date have not been
transferred to the Buyer or otherwise obtained by the Buyer as of the
Closing, the Seller shall allow, to the extent authorized by the terms of
such Permits and all Environmental Laws and other applicable Laws, the Buyer
to conduct the Business pursuant to the Seller's existing Permits. Regarding
each such Permit, the Seller shall allow such use until the Buyer obtains an
equivalent Permit; provided, however, the Buyer shall use commercially
-------- -------
reasonable efforts to expeditiously obtain such equivalent Permit.
1.8 Removal of Excluded Assets.
--------------------------
Prior to the Closing Date, the Seller and the Owners shall, and
shall cause the Subsidiaries and their subsidiaries to, remove all Excluded
Assets which are physically located on or in the Acquired Assets from the
Acquired Assets.
1.9 Pro Ration of Certain Items.
---------------------------
To the extent not otherwise reflected in the Net Working Capital
as finally determined under Section 1.4, the parties agree that the
following expenses, to the extent relating to any period commencing prior
to, and ending after, the Closing Date, shall be allocated between the
Buyer, on the one hand, and the Seller, on the other hand, with the Buyer to
be responsible for the portion of such expense that relates to the period
after the Closing Date, and the Seller to be responsible for the portion of
such expense that relates to the period on or prior to the Closing Date:
(a) personal and real property Taxes (but not Transfer
Taxes arising from the sale and purchase of the Acquired Assets, which are
dealt with in Section 7.4(b));
(b) electric, fuel, gas, telephone, sewer and utility
charges;
(c) rentals and other charges under leases to be assumed by
the Buyer pursuant to Section 1.1; and
(d) charges under maintenance and service contracts and
other Contracts, and fees under Permits to be transferred to the Buyer as
part of the Acquired Assets.
Any amounts due from one party to the other party pursuant
this Section 1.9 shall be paid in cash as promptly as practicable (but in no
event later than ten (10) calendar days after written request) by wire
transfer of immediately available funds to the account designated by the
requesting party.
17
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller hereby represents and warrants to the Buyer and
ICL, as of the date of this Agreement, as follows:
2.1 The Seller, the Subsidiaries and Fosbrasil.
------------------------------------------
(a) Section 2.1(a) of the Disclosure Schedule sets forth for
the Seller and each direct and indirect subsidiary of the Seller, other than
Astaris Production LLC (the "Subsidiaries"), and for Fosbrasil (i) its legal
------------
form (i.e., corporation, partnership, limited liability company, etc.) and
----
the name and jurisdiction of incorporation, formation or organization, as
applicable, (ii) the number of authorized, issued and outstanding shares of
each class of its capital stock or other authorized, issued and outstanding
Equity Interests, as applicable, the names of the holders thereof, and the
number of shares or percentage interests, as applicable, held by each such
holder and (iii) its entity classification for United States federal income
Tax purposes.
(b) Except for the Subsidiaries, Astaris Production LLC and
Fosbrasil or as set forth in Section 2.1(a) of the Disclosure Schedule,
neither the Seller nor any of the Subsidiaries owns any shares of any class
of capital stock of any corporation or ownership or other Equity Interest in
any other Person. No shares of any corporation or any ownership or other
investment interest, either of record, beneficially or equitably, in any
Person are included in the Acquired Assets, other than the Equity Interests
owned directly or indirectly by the Seller or Solutia in Astaris Brasil,
Astaris Canada, Astaris Europe, and Fosbrasil.
(c) The Seller and each Subsidiary is duly formed or
organized, validly existing and, where applicable, in good standing under
the Laws of its jurisdiction of incorporation, formation or organization, as
applicable. The Seller and each Subsidiary has the requisite corporate,
partnership or other applicable corresponding power and authority and
possesses all governmental franchises, licenses, permits, authorizations and
approvals necessary to own, lease and operate the Acquired Assets and to
carry on its business as and where now being conducted and, where
applicable, is duly qualified or licensed to do business and is in good
standing in the jurisdictions in which the ownership, lease or operation of
its property or the conduct of its business requires such qualification or
license, except jurisdictions in which the failure to be so qualified or
licensed does not have, and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
(d) Except as set forth in Section 2.1(d) of the Disclosure
Schedule, all the outstanding shares of capital stock or other Equity
Interests of the Subsidiaries and Fosbrasil owned by the Seller, a
Subsidiary, or Solutia (i) are duly authorized and validly issued and
outstanding, fully paid and nonassessable (in those jurisdictions where such
concepts are applicable), (ii) were not issued in violation of any
pre-emptive or similar rights or of any terms of any agreement or other
understanding binding upon the Seller, the Subsidiaries, or the Owners,
(iii) have been offered and sold in compliance with any and all applicable
securities Laws and (iv) are owned beneficially and of record by the Persons
set forth in Section 2.1(a) of the Disclosure Schedule free and clear of any
Encumbrances. Except as set forth in Section 2.1(d) of the
18
Disclosure Schedule, there are no options, subscriptions, warrants, calls,
commitments, agreements, contracts, understandings, restrictions,
pre-emptive rights, arrangements or rights of any character with respect to
the securities of the Subsidiaries or the securities of Fosbrasil owned by
the Seller, a Subsidiary or Solutia, or to which the Seller or any
Subsidiary or Owner is bound, that calls for the issuance, sale, pledge or
other disposition of any securities of any Subsidiary or Fosbrasil or the
conversion or exchange of any security into, or equity security of, any
Subsidiary or Fosbrasil. Except as set forth on Section 2.1(d) of the
Disclosure Schedule, there are no agreements concerning the issuance,
voting, transfer, acquisition or disposition of any securities of any
Subsidiary or Fosbrasil to which the Seller or any Subsidiary or Owner is
bound. Complete and correct copies of the charter documents (or equivalent
governing or organizational documents) and all amendments thereto and the
minute books of the Seller and the Subsidiaries (other than Astaris
International and except that the minute books of Seller have been redacted
in good faith with respect to any information to the extent directly related
to the Excluded Assets, the transactions contemplated hereby, any disputes
between the Owners, the process of the sale of the Business and the
strategic alternatives thereto and any valuation of the Business) and, to
the extent in the Seller's possession or accessible by the Seller, the
Subsidiaries or the Owners, Fosbrasil, have been made available to the Buyer
on or prior to the date of this Agreement.
2.2 Authorization, Etc.
------------------
(a) The Seller has full corporate or company power and
authority to execute and deliver this Agreement and the Transaction
Documents to which it is a party and to carry out and consummate the
transactions contemplated hereby and thereby to be carried out and
consummated by it. Subject to the Approval Order (solely with respect to
those matters regarding Solutia that are addressed in the definition
thereof) having been entered and still being in effect and not subject to
any stay pending appeal at the time of the Closing, this Agreement and the
Transaction Documents to which the Seller is a party have been duly and
validly authorized by the Seller and no other limited liability company
action or proceeding by the Seller is necessary to authorize the execution,
delivery or performance of this Agreement and the Transaction Documents by
the Seller.
(b) This Agreement has been duly and validly executed by the
Seller and, assuming this Agreement constitutes the legal, valid and binding
agreement of ICL and the Buyer, constitutes a legal, valid and binding
agreement of the Seller, enforceable against the Seller in accordance with
its terms. As of the Closing, each Transaction Document will be duly and
validly executed by the Seller (to the extent the Seller is a party thereto)
and, assuming such Transaction Document constitutes the legal, valid and
binding agreement of the Buyer and ICL (if a party thereto), will constitute
a legal, valid and binding agreement of the Seller (to the extent the Seller
is a party thereto), enforceable against the Seller in accordance with its
terms.
(c) The Bankruptcy Court has entered the Initial Relief
Order, a true and correct copy of which is attached hereto as Exhibit I.
---------
2.3 Financial Statements.
--------------------
(a) Section 2.3(a) of the Disclosure Schedule sets forth (i)
the audited consolidated balance sheet of the Seller, the Subsidiaries and
Astaris Production LLC at
19
December 31, 2003 and December 31, 2004 (the "2004 Balance Sheet"), and the
------------------
audited consolidated statements of income and cash flows of Seller, the
Subsidiaries and Astaris Production LLC for the years ended December 31,
2003 and 2004, in each case including notes thereto (collectively, the
"Audited Financial Statements") and (ii) the unaudited consolidated balance
----------------------------
sheet of the Seller, the Subsidiaries and Astaris Production LLC at June 30,
2005, and the unaudited consolidated statements of income and cash flows of
Seller, the Subsidiaries and Astaris Production LLC for the six months ended
June 30, 2005, in each case including any notes thereto (collectively, the
"Historical Interim Financial Statements"). The books of account and related
---------------------------------------
records of the Seller and the Subsidiaries fairly reflect in reasonable
detail all assets, liabilities and transactions relating to such Persons
(including the Acquired Assets and Assumed Liabilities) and the Seller and
the Subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurances that transactions are recorded
as necessary to permit preparation of financial statements in conformity
with GAAP. The Audited Financial Statements and Historical Interim Financial
Statements are correct and complete, in all material respects, and have been
prepared in accordance with the books and records of the Seller, the
Subsidiaries and Astaris Production LLC in conformity with GAAP, applied on
a consistent basis, as in effect during the periods indicated, except, in
the case of the Historical Interim Financial Statements, for customary year
end adjustments that are not expected to be material individually or in the
aggregate. The foregoing statements of income and cash flows, including any
notes thereto, present fairly, in all material respects, the combined
results of operations and cash flows of the Seller, the Subsidiaries and
Astaris Production LLC for the six months ended June 30, 2005 and the years
ended December 31, 2003 and 2004. The foregoing balance sheets, including
any notes thereto, present fairly, in all material respects, the
consolidated financial position of Astaris, the Subsidiaries and Astaris
Production LLC as of June 30, 2005 and December 31, 2003 and 2004.
(b) Section 2.3(b) of the Disclosure Schedule contains the
following financial statements: (i) the unaudited balance sheet for the
Acquired Assets and Assumed Liabilities as of December 31, 2004 and the
related unaudited statement of income for the year then ended and (ii) the
unaudited balance sheet (the "Interim Balance Sheet") for the Acquired
---------------------
Assets and Assumed Liabilities as of June 30, 2005 (the "Interim Balance
---------------
Sheet Date") and the related statement of income for the six months then
----------
ended. The year-end and interim financial statements described in clauses
(i) and (ii) of the preceding sentence are referred to herein as the
"Business Financial Statements." The Business Financial Statements have been
-----------------------------
prepared based on the Audited Financial Statements and the Historical
Interim Financial Statements (as applicable), except as otherwise noted
therein, and give effect to assumptions used in the preparation thereof,
which in the view of management of the Seller are on a reasonable basis and
in good faith and fairly present in all material respects the financial
position and results of operations for the Acquired Assets and Assumed
Liabilities after giving effect to the transaction and adjustments referred
to in the Business Financial Statements as of and for the periods presented
therein; provided that the Business Financial Statements include all
--------
properties, rights and assets relating to the facility located in Sauget,
Illinois based on the contracts and cost structure in force during the
period of the Business Financial Statements and do not reflect the Sauget
Supply Agreement.
(c) Section 2.3(c) of the Disclosure Schedule sets forth the
audited balance sheet of Fosbrasil at December 31, 2003 and December 31,
2004, and the audited statements of income, changes in shareholders' equity
and changes in financial position of Fosbrasil for the
20
years ended December 31, 2003 and 2004, in each case including notes thereto
(collectively, the "Fosbrasil Financial Statements"). To the Knowledge of
------------------------------
the Seller, the Fosbrasil Financial Statements (i) are correct and complete
and in accordance with the books and records of Fosbrasil, (ii) fairly
present the results of operations, financial position, assets and
liabilities of as of December 31, 2003 and 2004 and for the years then ended
and (iii) have been prepared in conformity with Brazilian accounting
principles, applied on a consistent basis, as in effect during the periods
indicated.
2.4 No Approvals or Conflicts.
-------------------------
Except as set forth in Section 2.4 of the Disclosure
Schedule, the execution, delivery and performance by the Seller of this
Agreement and the consummation by the Seller or any Subsidiary of the
transactions contemplated hereby to be consummated by it will not (i)
violate, conflict with or result in a breach by the Seller or any Subsidiary
of any provision of any certificate of formation, limited liability company
agreement, charter, bylaws or equivalent formation or governance document of
the Seller or any Subsidiary, (ii) violate, conflict with or result in a
breach of, in any material respect, any provision of, or constitute a
default by the Seller or any Subsidiary (or create an event which, with
notice or lapse of time or both, would constitute such a default) or give
rise to any right of termination, cancellation, modification or acceleration
of or under, or result in the creation of any Encumbrance upon any of the
Acquired Assets or give to others any interests or rights therein under, any
material note, bond, mortgage, indenture, deed of trust, license, franchise,
Permit, lease, contract, agreement or other instrument or understanding to
which the Seller or any Subsidiary is a party, or by which the Seller or any
Subsidiary may have rights or the Business or any of the Acquired Assets may
be bound or subject, (iii) violate or conflict with, or result in a breach
of, in any material respect, any order, injunction, judgment, ruling,
constitution, treaty, statute, law, ordinance, rule or regulation (each, and
collectively, "Law") of any United States or foreign federal, state,
---
provincial or local government or other political subdivision thereof, any
entity, authority or body exercising executive, legislative, judicial,
regulatory or administrative functions of any such government or political
subdivision, and any supranational organization of sovereign states
exercising such functions for such sovereign states (each, and collectively,
"Governmental Authority") applicable to the Seller, any Subsidiary or any of
----------------------
their respective properties or the Business or (iv) except for applicable
requirements of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), and any other Law that is designed or intended to
-------
prohibit, restrict or regulate (a) foreign investment or (b) antitrust,
monopolization, restraint of trade or competition ("Competition/Investment
----------------------
Law"), and except for reports to be filed under the Securities Exchange Act
---
of 1934, as amended (the "Exchange Act"), require any material order,
------------
Consent, clearance, approval or authorization of, or notice to, or
declaration, filing, application, qualification or registration with, any
Governmental Authority or other Person, including in connection with the
assignment of Contracts or Permits (including any pending application
therefor). Except as set forth in Section 2.4 of the Disclosure Schedule, as
of the date hereof, the Seller and the Owners have caused to be made all
appropriate notices and filings required under any Government Order entered
or issued in connection with the formation of Astaris, including the
Decision & Order (Docket No. C-3935) issued May 15, 2000 (the "Consent
-------
Order"). The Seller has obtained the Consents to the assignment to the
-----
Buyer, effective as of the Closing, of the Monsanto Supply Agreement (i.e.,
the Consent of P4 Production L.L.C.) and Monsanto
21
Operating Agreement (i.e., the Consent of Monsanto Company), and each such
Consent is in full force and effect.
2.5 Compliance with Law; Governmental Authorizations.
------------------------------------------------
Except with respect to the subject matter of Section 2.9 (Tax
Matters), Section 2.10 (Employee Benefits) and Section 2.14 (Environmental
Matters), which constitute the sole and exclusive representations and
warranties of the Seller with respect to compliance with tax, employee
benefits and environmental law (except that nothing contained herein is
intended or shall be construed to limit the representations and warranties
set forth in Section 2.3), and except as set forth in Section 2.5 of the
Disclosure Schedule, (a) the Seller and the Subsidiaries have conducted the
Business and are now doing so in compliance in all material respects with
all applicable Laws, (b) no notice, citation, summons or order has been
received by the Seller or any Subsidiary, no complaint has been filed, no
penalty has been assessed and no investigation or review is pending or, to
the Knowledge of the Seller, threatened, by any Governmental Authority or
other entity with respect to any alleged (i) material violation of any
order, injunction, judgment, ruling, Law or regulation of any court or
Governmental Authority by the Seller or any Subsidiary or applicable to the
Business or Acquired Assets; or (ii) failure in any material respect by the
Seller or any of its Affiliates to have any permit required for the conduct,
ownership or operation of the Business, the Acquired Assets or the
Subsidiaries, (c) there is no (i) to the Knowledge of the Seller, material
claim or violation of any order, injunction, judgment, ruling, Law,
regulation or Encumbrance applicable to the Business, the Acquired Assets or
the Subsidiaries or (ii) Proceeding pending or, to the Knowledge of the
Seller, threatened (whether for condemnation or otherwise) against the
Seller or the Subsidiaries or the Owners or, to the Knowledge of the Seller,
any other Person, which is reasonably likely to materially and adversely
affect, as to any material portion of the Real Property, the other Acquired
Assets or the assets of the Subsidiaries, the zoning classification in
effect or the Seller's or any Subsidiary's right to own, operate and occupy
the Real Property and use and possess the other Acquired Assets or the
assets of the Subsidiaries in the manner in which it currently owns,
operates and occupies the Real Property and uses and possesses the other
Acquired Assets or the assets of the Subsidiaries, and no zoning, building
or similar Law, regulation, ordinance or order is, or on the Closing Date
will be, violated in any material respect and (d) the Seller and the
Subsidiaries have all material Permits necessary to conduct the Business as
currently conducted and to operate, own, lease or otherwise hold the
Acquired Assets or the assets of the Subsidiaries, as the case may be (the
"Seller Permits"). All of the Seller Permits are (i) other than
--------------
Environmental Permits (which are set forth in Section 2.14(b) of the
Disclosure Schedule), listed in Section 1.1(a)(viii) of the Disclosure
Schedule and (ii) in full force and effect, and there are no Proceedings
pending or, to the Knowledge of the Seller, threatened, that seek the
revocation, cancellation, suspension or any adverse modification of any such
Seller Permits.
2.6 Litigation.
----------
Except as set forth in Section 2.6 of the Disclosure Schedule,
there are no material suits, actions, proceedings or investigations
(collectively, "Proceedings") pending or, to the Knowledge of the Seller,
-----------
threatened against, the Seller, the Subsidiaries, the Business or any of the
Acquired Assets before any arbitrator, court or Governmental Authority.
Except as set forth in Section 2.6 of the Disclosure Schedule, there are no
outstanding material judgments, decrees
22
or orders of any arbitrator, court or Governmental Authority against the
Seller, the Subsidiaries or either of the Owners, which relate to or arise
out of the conduct of the Business or the ownership, condition or operation
of the Business or the Acquired Assets. The Seller has heretofore provided
the Buyer with a list setting forth generally a description of all material
settlements or orders regarding such Proceedings, or other material
threatened actions or matters (including product liability matters set forth
in Section 2.17 hereof) binding on the Seller, any of the Subsidiaries or
the Acquired Assets.
2.7 Title; Condition of Assets.
--------------------------
(a) Except as set forth in Section 2.7(a) of the Disclosure
Schedule, the Seller and the Subsidiaries have good, valid, marketable and
insurable fee simple absolute title and interest to all of the Acquired
Assets constituting Owned Real Property and a good and valid leasehold
interest in all Leased Real Property, subject only to the Permitted
Encumbrances. None of the Acquired Assets or the assets of the Subsidiaries
is subject to any Encumbrance, except (i) in the case of the Real Property,
Encumbrances, none of which, individually or in the aggregate, materially
impairs the use or operations of the affected property or the conduct of the
Business thereon as it is currently being used and conducted, (ii) in the
case of the Real Property, Encumbrances for current real estate Taxes not
yet due and payable or which are being contested in good faith by
appropriate proceedings, and mechanics', workmen's, repairmen's,
warehousemen's, carriers' or other similar liens, including all statutory
liens, arising or incurred in the ordinary course of business, (iii) as to
the Leased Real Property only, the terms and conditions of the Leases with
respect thereto, (iv) with respect to leased or licensed personal property,
the terms and conditions of the lease or license applicable thereto, (v)
zoning, building codes and other land use Laws regulating the use or
occupancy of such Real Property or the activities conducted thereon which
are imposed by any Governmental Authority having jurisdiction over such Real
Property which are not violated by the current use or occupancy of such Real
Property or the operation of the Business, except where any such violation
would not reasonably be expected to individually or in the aggregate
materially impair the use or operation of the affected property or the
conduct of the Business thereon as it is currently being conducted, (vi)
with respect to leased equipment included in the Acquired Assets, the
Encumbrances set forth in Section 2.7(a)(vi) of the Disclosure Schedule and
(vii) Encumbrances which would not, taken together with all other liens
described in clauses (i) through (vi) above, reasonably be expected to
individually or in the aggregate, materially impair the use or operations of
the Acquired Assets or the conduct of the Business thereon as it is
currently being used and conducted (collectively, the "Permitted
---------
Encumbrances"). The Seller has prior to the date of this Agreement delivered
------------
to the Buyer, to the extent possessed by the Seller or the Subsidiaries,
copies of all existing title policies and surveys and all other material
documents, instruments and agreements directly affecting title to, or
Seller's or any Subsidiary's property rights to ownership, use and
possession of, the Real Property.
(b) Except as set forth in Section 2.7(b) of the Disclosure
Schedule, the buildings, machinery, equipment, tools, furniture,
improvements and other tangible assets of the Business included in the
Acquired Assets and the assets of the Subsidiaries are, in all material
respects, in reasonably good operating condition and repair, normal wear and
tear excepted, fit for the purposes for which they are used in the Business
and sufficient to permit their use in the
23
continuing operations of the Business as such operations are currently
conducted or have been conducted consistent with past practices.
2.8 Absence of Certain Changes.
--------------------------
Except as set forth in Section 2.8 of the Disclosure Schedule or
as otherwise contemplated hereby, since December 31, 2004 (x) the Seller and
the Subsidiaries have conducted the Business only in the ordinary course
consistent with past practice in all material respects and (y) there has not
been any event or occurrence which has had, or would reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect.
Without limiting the generality of the foregoing, except as set forth in
Section 2.8 of the Disclosure Schedule or as otherwise specifically
contemplated hereby, since December 31, 2004 there has not been:
(a) any damage, destruction or loss of real or personal
property (whether or not covered by insurance) affecting the Business in
excess of two hundred and fifty thousand dollars ($250,000);
(b) any strikes, work stoppages or other material labor
disputes involving employees of the Business;
(c) any waiver or cancellation of any material term of any
Material Contract or of any material right or claim of the Seller or any
Subsidiary under any Material Contract, or the entering into of any new
Material Contract;
(d) any sale, transfer or other disposition of any assets,
properties or rights of the Business except (i) any assets, properties or
rights which, when taken together with all assets, properties or rights
disposed of, are immaterial to the Business taken as a whole and (ii) sales,
transfers or other dispositions in the ordinary course of business
consistent with past practice;
(e) other than any retention bonus or similar compensation,
any (i) increase in the salary or other compensation of employees of the
Business other than in the ordinary course of business consistent with past
practice, (ii) increase in any salary or other compensation (other than
salary compensation in the ordinary course of business consistent with past
practice) payable to any director, officer or other member of senior
management of the Business, whether or not in the ordinary course of
business consistent with past practice, (iii) advance (excluding advances
for ordinary business expenses in the ordinary course of business consistent
with past practice), loan or commitment therefor made by the Seller or any
of the Subsidiaries to any officer or other member of senior management of
the Seller or the Subsidiaries or (iv) adoption, termination, material
amendment or other material modification of any Benefit Plan, or any
material increase in any benefits or benefit levels under any Benefit Plan;
(f) any change in the accounting methods or practices
followed by or applicable to the Seller or the Subsidiaries (other than such
as have been required by applicable law or GAAP);
24
(g) the incurrence of any Encumbrances, other than Permitted
Encumbrances, upon any of the assets, rights or properties of the Business;
(h) any material breach under, or any material amendment or
modification to, or termination (completely or of a material portion) of,
any Material Contract;
(i) prior to the Closing, any amendment to the limited
liability company agreement, certificate of incorporation, bylaws or other
governing or organizational documents of the Seller or the Subsidiaries;
(j) any merger, acquisition, consolidation or other business
combination by the Seller or Subsidiaries;
(k) any incurrence, assumption or guarantee of any obligation
or Liability (absolute, accrued, contingent or otherwise) by or on behalf of
the Seller or Subsidiaries, except in the ordinary course of business
consistent with past practice which has not had, or would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse
Effect;
(l) any discharge or satisfaction of any Encumbrance against
or in favor of the Business, or payment or satisfaction of any obligation or
liability of or relating to the Business (whether absolute, accrued,
contingent or otherwise), other than (i) liabilities shown or reflected on
the 2004 Balance Sheet, or (ii) liabilities incurred since December 31, 2004
in the ordinary course of business consistent with past practice which have
not had, or would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect;
(m) any disposition of or failure to keep in effect any
rights in, to or for the use of any material Permit (including any pending
application therefor) of the Business;
(n) any cancellation, modification or waiver of any material
debts or material claims held by the Seller (including any such debts or
claims of an Affiliate of the Seller) or any waiver of any other rights of
the Seller or any Subsidiary, in each case in respect of a Material Contract
or other Acquired Asset or Assumed Liability, or otherwise related to the
Business;
(o) any disposition of or failure to keep in effect any
rights in, to or for the use of any of the material Seller Intellectual
Property;
(p) any dividend, distribution or payment (including the
declaration or setting aside therefor, or agreement with respect thereto
other than any dividends for cash or an Excluded Asset) in respect of the
Seller's Equity Interests or redemption, repurchase or acquisition (or
agreement with respect thereto) of any of the Seller's Equity Interests, or
the payment of any Intercompany Payables;
(q) any capital expenditures or capital additions or
betterments exceeding in the aggregate one hundred thousand dollars
($100,000), except such as may be involved in the ordinary repair,
maintenance or replacement of the Seller's assets not exceeding in the
aggregate one million dollars ($1,000,000);
25
(r) any loss or impairment of or, to the Knowledge of Seller,
any threat of any loss or impairment of the Seller's or any of the
Subsidiaries' relations with any of the suppliers, clients or customers of
the Business which has had, or would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, or any material
change in Seller's or any of the Subsidiaries' customary practices with
respect to the collection of accounts receivable of the Business or payment
of accounts payable of the Business or the provision of discounts, rebates
or allowances; or
(s) any agreement or commitment by or on behalf of the Seller
or the Subsidiaries to do any of the foregoing.
2.9 Tax Matters.
-----------
Except as set forth in Section 2.9 of the Disclosure Schedule, or
as would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect:
(a) all Tax Returns required to be filed prior to or on the
Closing Date by the Seller and the Subsidiaries (separately or as part of an
affiliated, consolidated, combined or unitary group) with respect to the
Business (A) have been or shall be timely filed (subject to permitted
extensions applicable to such filing) and (B) are correct and complete in
all respects; and all Taxes of the Seller and the Subsidiaries shown as due
or payable on such Tax Returns have been or shall be paid within the
prescribed period or any extension thereof, other than Taxes that are being
contested in good faith for which adequate reserves have been established;
(b) no claim for unpaid Taxes has become a lien against the
Acquired Assets or is being asserted against the Seller or any of the
Subsidiaries except for liens for Taxes not yet due and for which adequate
reserves have been established; and
(c) there are no (w) examinations, audits, actions,
Proceedings, investigations or disputes pending, (x) claims asserted in
writing for Taxes, (y) waivers or extensions of statutes of limitation with
respect to Taxes currently in effect or (z) closing agreements, or similar
agreements entered into or issued by any Governmental Authority, in each
case, with respect to Taxes of the Seller or a Subsidiary that would result
in Buyer being liable for such Taxes following the Closing.
2.10 Employee Benefits.
-----------------
(a) Section 2.10(a) of the Disclosure Schedule sets forth a
complete and accurate list of (i) each "employee benefit plan" (within the
meaning of Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")), (including any "multiemployer plan" as defined
-----
in Section 3(37) of ERISA) and (ii) each other pension, retirement,
supplemental retirement, deferred compensation, excess benefit, profit
sharing, bonus, incentive, stock purchase, stock ownership, stock option,
stock appreciation right, severance, salary continuation, termination,
change-of-control, health, life, disability, group insurance, vacation,
holiday and other material fringe benefit plan, program, contract, or
arrangement maintained, contributed to, or required to be contributed to, by
the Seller or any Subsidiary for the benefit of any Employee or Former
Employee, director, officer or independent contractor of the Seller or any
Subsidiary in the United States or under which the Seller or any Subsidiary
has any
26
liability with respect to any Employee or Former Employee, director, officer
or independent contractor of the Seller or any Subsidiary in the United
States (collectively, the "Benefit Plans").
-------------
(b) The Benefit Plans are in compliance in all material
respects with their terms and applicable requirements of ERISA and other
applicable laws. Each Benefit Plan which is intended to be qualified within
the meaning of Section 401 of the Code is so qualified and all related
trusts are exempt from taxation under Section 501(a) or the Code.
(c) No liability under Title IV of ERISA or Section 412 of
the Code (including any liability relating to an "accumulated funding
deficiency") has been incurred by the Seller or any Subsidiary or by any
other trade or business, whether or not incorporated, that together with the
Seller or any Subsidiary would be deemed a "single employer" for purposes of
Section 414 of the Code (an "ERISA Affiliate"), that, if due and payable,
---------------
has not been satisfied in full as of the Closing Date.
(d) Neither the Seller nor any of the Subsidiaries or ERISA
Affiliates has incurred, directly or indirectly, any liability in respect of
any multiemployer plan (as defined in Section 3(37) of ERISA or Section
414(f) of the Code (a "Multiemployer Plan")) on account of any "withdrawal,"
------------------
"partial withdrawal," "reorganization" or "insolvency" (all such terms
within the meaning of Title IV of ERISA), which remains unsatisfied. None of
the Benefit Plans are Multiemployer Plans.
(e) Except as disclosed in Section 2.10(e) of the Disclosure
Schedule, all contributions to, and payments from, the Benefit Plans (other
than payments to be made from a trust, insurance contract or other funding
medium) which may have been required to be made in accordance with the terms
of any such Benefit Plan and, when applicable, Section 302 of ERISA or
section 412 of the Code, have been timely made.
(f) Except as set forth in Section 2.10(f) of the Disclosure
Schedule, no Employee or Former Employee is a party to, or entitled to the
benefit of, any Benefit Plan which would provide such employee any payment
or benefit (or accelerated payment or vesting thereof) upon the execution of
this Agreement, equityholder approval of this Agreement or the transaction
contemplated hereby, consummation of the transactions contemplated hereby
or, following such consummation, upon the occurrence of some other event,
whether or not subject to Section 280G of the Code.
(g) There are no pending or, to the Knowledge of the Seller,
threatened claims or litigations with respect to any Benefit Plans, other
than routine claims for benefits by participants and beneficiaries, except
as set forth in Section 2.10(g) of the Disclosure Schedule. None of the
Seller, the ERISA Affiliates, the Subsidiaries or any Benefit Plan has
received any communication from any Governmental Authority with
responsibility for Taxes, governmental or quasi-governmental agency, the
Department of Labor or the Pension Benefit Guaranty Corporation regarding
any Benefit Plan (other than routine correspondence in the ordinary course
of business).
(h) None of the Seller, the ERISA Affiliates, nor to the
Knowledge of the Seller, any fiduciary, trustee or administrator of any
Benefit Plan, has engaged in or, in connection
27
with the transactions contemplated by this Agreement, will engage in any
transaction with respect to any Benefit Plan which would reasonably be
expected to subject any such Benefit Plan, the Seller, any ERISA Affiliate
or Buyer to a tax, penalty or liability for a "prohibited transaction" under
Section 406 of ERISA or Section 4975 of the Code. None of the assets of any
Benefit Plan is invested in any property constituting "employer real
property" or an "employer security" within the meaning of Section 407 of
ERISA.
(i) Each Employee, Former Employee and independent contractor
has been properly classified as such for all purposes, including but not
limited to for purposes of tax withholding and eligibility for or
participation in any Benefit Plan.
(j) Each Benefit Plan subject to Section 409A of the Code has
been operated in material compliance with Section 409A of the Code and the
applicable guidance thereunder.
(k) With respect to each Benefit Plan, the Seller has made
available to the Buyer, as applicable, (i) a complete and accurate copy of
each such plan (including the most recent summary plan description prepared
with respect to such plan and each summary of material modifications
thereto); (ii) the most recent copy of the annual report form (Form 5500
Series) of each such plan for which such form is required (including any
schedules thereto); (iii) the most recent actuarial report for each such
plan; (iv) the most recent copy of its favorable determination letter; (v)
all trust documents, investment management contracts, custodial agreements
and insurance contracts relating thereto; (vi) all records, notices and
filings concerning IRS or Department of Labor audits or investigations,
"prohibited transactions" within the meaning of Section 406 of ERISA or
Section 4975 of the Code and "reportable events" within the meaning of
Section 4043 of ERISA.
(l) Section 2.10(1) of the Disclosure Schedule sets forth a
complete and accurate list of each benefit plan, program, policy or
arrangement presently maintained by, or contributed to by the Seller or the
Subsidiaries for the benefit of any Employee or Former Employee, including
any such plan required to be maintained or contributed to by the law of the
relevant jurisdiction, which would be described in (a) above, but for the
fact that such plans are maintained outside the jurisdiction of the United
States (but excluding plans maintained by a governmental entity) (the
"Foreign Plans"), and a true and complete copy of each written Foreign Plan
-------------
and of any description of each Foreign Plan that is not written has been
made available to Buyer.
(m) The Seller and each of its Affiliates and each of the
Foreign Plans are in compliance in all material respects with the provisions
of the laws of each jurisdiction in which any of the Foreign Plans are
maintained, to the extent such laws are applicable to the Foreign Plans.
(n) Except as disclosed in Section 2.10(n) of the Disclosure
Schedule, all contributions to, and payments from, the Foreign Plans (other
than payments to be made from a trust, insurance contract or other funding
medium) which may have been required to be made in accordance with the terms
of any such Foreign Plan maintained by the Seller or the Subsidiaries,
28
and, when applicable, the law of the jurisdiction in which such plan is
maintained, have been timely made.
(o) Each of the Foreign Plans has been administered at all
times, in all material respects, in accordance with its terms. Except as set
forth in Section 2.10(o) of the Disclosure Schedule, there are no pending
investigations by any governmental agency involving the Foreign Plans, no
claims pending or to the Knowledge of the Seller threatened in writing
(except for claims for benefits payable in the normal operation of the
Foreign Plans), suits or proceedings against any Foreign Plan or asserting
any rights or claims to benefits under any Foreign Plan which would
reasonably be expected to give rise to any material liability, nor, are
there any facts that would reasonably be expected to give rise to any
material liability in the event of such investigation, claim, suit or
proceeding.
(p) Except as otherwise reflected in Working Capital in the
Conclusive Net Working Capital and Capex Statement, the assets of each of
the Foreign Plans (which is an employee pension benefit plan as defined in
Section 3(2) of ERISA or otherwise provides retirement, medical or life
insurance benefits following retirement) are at least equal to the
accumulated benefit obligations of such plans (calculated using the
generally accepted accounting principles of the applicable jurisdiction).
(q) Section 2.10(q) of the Disclosure Schedule identifies all
Non-Union Employees who are actively employed as of the date of this
Agreement by name, location, title or function, current base salary or
hourly wage, date of hire and status (part-time, full-time, salaried,
hourly, on leave of absence (including sick leave, short-term disability,
maternity leave and military leave) or vacation).
(r) Section 2.10(r) of the Disclosure Schedule identifies all
Non-Union Employees who are currently employed as of the date of this
Agreement but not at work due to long-term disability by name, location,
title or function, current base salary or hourly wage, and date of hire.
(s) Section 2.10(s) of the Disclosure Schedule identifies all
Union Employees who are actively employed as of the date of this Agreement
by name, location, title or function, current hourly wage, date of hire,
seniority, status (part-time, full-time, on leave of absence or vacation)
and applicable collective bargaining agreement.
(t) Section 2.10(t) of the Disclosure Schedule (i) identifies
all Union Employees who are currently employed as of the date of this
Agreement but not at work due to long-term disability by name, location,
title or function, current base salary or hourly wage, and date of hire, and
separately identifies (ii) all Union Employees who are Former Employees
subject to recall or reemployment rights under any collective bargaining
agreement or otherwise by name, location, prior title or function, prior
base salary or hourly wage, and original date of hire.
(u) Section 2.10(u) of the Disclosure Schedule identifies all
Non-U.S. Employees who are actively employed as of the date of this
Agreement by name, location, title or function, salary or hourly wage, date
of hire, seniority and status (part-time, full-time, on leave of absence or
vacation).
29
2.11 Labor and Employment Matters.
----------------------------
Except as set forth in Section 2.11 of the Disclosure Schedule, with
respect to the Business: (a) there is no collective bargaining agreement
applicable to Employees, and there has been no such agreement in effect
during the three (3) years preceding the Closing; (b) to the Knowledge of
the Seller, no union organizing or decertification campaigns are underway or
threatened, and none has occurred during the three (3) years preceding the
Closing; (c) there is no pending or, to the Knowledge of the Seller,
threatened unfair labor practice charge or complaint, union representation
petition or grievance, or labor grievance or arbitration proceeding (except
that, in the case of labor grievance or arbitration proceeding, disclosure
is required only if such proceeding has had, or would reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect); (d)
there is no pending or, to the Knowledge of the Seller, threatened strike,
slowdown, work stoppage, lockout or other such labor dispute, and there has
been no such event during the three (3) years preceding the Closing; (e)
there is no pending or, to the Knowledge of the Seller, threatened charge or
complaint of unlawful harassment or discrimination, violation of the
National Labor Relations Act, violation of any law governing workplace
safety (including the Occupational Safety and Health Act), or violation of
any other law governing labor or employment matters; (f) within the past
twelve months, no "plant closing" or "mass layoff," as those terms are
defined in the Worker Adjustment and Retraining Notification Act ("WARN
----
Act"), has been implemented, nor has any other similar event requiring
---
notice to any Governmental Authority under any Law similar to the WARN Act
been implemented; and (g) neither the Seller nor any Subsidiary recognizes
or is required to recognize any labor organization as the collective
bargaining representative of any employees of the Business.
2.12 Intellectual Property.
---------------------
(a) Section 2.12(a) of the Disclosure Schedule contains a
complete and accurate list of all issued patents and pending patent
applications, material unregistered trademarks, service marks, trade names
and copyrightable software (excluding "off the shelf" software), Internet
domain names, and all registrations and applications for registration of
trademarks, service marks, trade names and trade dress owned by the Seller
or any Subsidiary and used or held for use in the conduct of the Business
(other than the PPA Technology), specifying as to each such issuance,
registration or application, as applicable: (i) the jurisdictions in which
the item is issued or registered or in which any application for issuance or
registration has been filed; (ii) the respective issuance, registration, or
application number of the item; (iii) the respective issuance, registration
or filing date of the item; and (iv) the owner or owners of record of each
item.
(b) Section 2.12(b) of the Disclosure Schedule contains a
complete and accurate list of all material licenses, sublicenses, consents
and other similar types of agreements (whether written or otherwise) (i)
pertaining to any Intellectual Property used or held for use in the conduct
of the Business (including licenses for computer software, other than
off-the-shelf software (including all seat licenses for such software
collectively) with annual license fees of, or a total replacement cost
reasonably estimated to be, less than thirty thousand dollars ($30,000)), or
(ii) by which the Seller or any Subsidiary licenses or otherwise authorizes
a third party to use any Intellectual Property used or held for use in the
conduct of the Business. Neither the Seller or any
30
Subsidiary nor, to the Knowledge of the Seller, any other party, is in
breach of or default under any such license, sublicense, consent or other
similar type of agreement and each such license, sublicense, consent or
other similar type of agreement is now, and immediately following the
Closing shall be, valid and in full force and effect. To the Knowledge of
the Seller, neither the Seller nor any of the Subsidiaries is a party to any
contract or agreement related to the ownership, co-ownership or
joint-ownership of any material patent or patent application that would (i)
materially restrict the assignment, license, transfer or conveyance of an
interest of the Seller in such patent or patent application or (ii) result
in the Seller surrendering, abandoning or forfeiting any material rights in
such patents or patent application upon the transfer and/or conveyance of
the rights of the Seller in such patents and/or patent applications to
Buyer.
(c) Except as set forth in Section 2.12(c) of the Disclosure
Schedule, (i) the Seller or the Subsidiaries own, are licensed or otherwise
have the right to use, and immediately after Closing the Buyer will own, be
licensed or have the right to use on terms identical to the terms in effect
immediately prior to Closing, all Intellectual Property necessary and
sufficient to operate the Business, in all material respects, as currently
conducted (collectively, the "Seller Intellectual Property") free and clear
----------------------------
of all Encumbrances, other than Permitted Encumbrances; (ii) to the
Knowledge of the Seller, (A) the operation of the Business does not, and
immediately after the Closing will not, infringe, dilute, or otherwise
violate the Intellectual Property rights of any Person and (B) no Person is
infringing, diluting or otherwise violating any of the material Seller
Intellectual Property owned by the Seller or the Subsidiaries; and (iii) no
suit, action or proceeding is currently pending, outstanding or, to the
Knowledge of the Seller, threatened against the Seller or any Subsidiary
that (A) challenges the validity or ownership of, or any right of the Seller
or any Subsidiary to use or otherwise exploit any Seller Intellectual
Property owned by the Seller or a Subsidiary, (B) asserts or claims that the
operation of the Business infringes, dilutes or otherwise violates any
Person's Intellectual Property rights, or (C) asserts or claims that any
Person is infringing, diluting or otherwise violating any of the Seller
Intellectual Property owned by the Seller or any Subsidiary. To the
Knowledge of the Seller, except for as set forth in Section 2.12(c) of the
Disclosure Schedule, the Buyer will not be subject to any obligation or
restriction on or for the use of any Seller Intellectual Property if the
Buyer conducts the Business after Closing in substantially the same manner
as the Seller conducts the Business as of the date hereof; provided that any
--------
Seller Intellectual Property not owned by the Seller or a Subsidiary that is
used pursuant to a license, consent, sublicense or other similar type of
agreement (whether written or otherwise) will be subject to the obligations
or restrictions to which such Seller or Subsidiary is bound or subject
immediately prior to the Closing that are contained in or arises out of any
such agreement.
(d) Except as set forth in Section 2.12(d) of the Disclosure
Schedule, (i) all of the patents and copyright, trademark, service ▇▇▇▇ and
Internet domain name registrations set forth in Section 2.12(a) of the
Disclosure Schedule are in full force and effect, are held of record in the
name of the Seller or a Subsidiary (other than Astaris International) and
are not the subject of any cancellation or reexamination proceeding or any
other proceeding challenging their extent or validity, and (ii) the Seller
or a Subsidiary (other than Astaris International) (or in the case of patent
applications listed on Section 2.12(a) of the Disclosure Schedule, either
the Seller or an employee of the Seller (or a Subsidiary (other than Astaris
International) or an employee of such Subsidiary) that is contractually
obligated to assign all rights in and to the patent application to the
Seller or a Subsidiary (other than Astaris International), as applicable) is
the applicant of record of
31
all patent applications, and applications for all trademark, service ▇▇▇▇
and copyright registrations set forth in Section 2.12(a) of the Disclosure
Schedule, and no opposition, extension of time to oppose, interference,
final rejection, or final refusal to register has been received in
connection with any such application.
(e) None of the material trade secrets, know-how or other
confidential or proprietary information included in the Seller Intellectual
Property has been disclosed to any Person unless such disclosure was prudent
or deemed necessary by the Seller or the Subsidiaries in the reasonable
business judgment of the Seller or the Subsidiaries and was either made
pursuant to an appropriate confidentiality agreement or to an employee of
the Seller or a Subsidiary with a duty of confidentiality.
(f) Except as set forth in Section 2.12(f) of the Disclosure
Schedule, Astaris Production, LLC and Foret are the sole and exclusive
owners of and control all right, title and interest in and to the PPA
Technology and no Person, other than Astaris Production LLC and Foret, has
any right, title or interest in or to the PPA Technology (including the
right to exploit the PPA Technology anywhere in the world). Except for the
Seller, Astaris Production, LLC and Foret, no Person has any right to
practice or use the PPA Technology anywhere in the world, whether as a
licensee, transferee, sublicensee, or purchaser of any rights in or to the
PPA Technology. Set forth in Section 2.12(f) of the Disclosure Schedule is a
complete and accurate list of any contract, agreement or arrangement ("PPA
---
Restriction") that restricts the use or transfer of PPA Technology or any
-----------
equipment used or intended to be used for the manufacture of purified
phosphoric acid to which any Owner, Seller, Subsidiary or any of their
respective subsidiaries is a party or otherwise bound or subject. Neither
ownership of nor any right in or to the PPA Technology is necessary for the
operation of the Business as currently conducted.
(g) The information technology systems owned, licensed,
leased, operated on behalf of, or otherwise used or held for use in the
Business, including all computer hardware, software, firmware and
telecommunications systems, perform reliably and in material conformance
with the appropriate specifications or documentation for such systems.
Except for scheduled or routine maintenance, such information technology
systems are fully available for use by the Seller and, as applicable, by its
customers and clients, as necessary to meet the Seller's obligations. The
Seller has taken commercially reasonable steps to provide for the archival,
back-up, recovery and restoration of the critical business data of the
Business. The computer software owned by the Seller or the Subsidiaries and,
to the Knowledge of the Seller, all of the licensed software used in the
Business, perform in material conformance with the applicable documentation
for such software, and do not contain any viruses, trapdoors, worms, or
other disabling or malicious code. Except as set forth in Section 2.12(g) of
the Disclosure Schedule, the information technology system including the
software, hardware, networks, and interfaces included in the Acquired Assets
are sufficient in all material respects for the operation of the Business as
currently conducted.
2.13 Contracts.
---------
(a) Section 2.13(a) of the Disclosure Schedule sets forth, by
subsection and category, as of the date of this Agreement, a complete list
of each of the oral or written contracts, instruments, Leases and other
leases, deeds and agreements by which the Seller or any Subsidiary
32
is bound and that relate to the Business or by which any assets or
properties of the Business are bound (including any Acquired Assets or
Assumed Liabilities) included within any of the following types or
categories (collectively, the "Material Contracts"):
------------------
(i) indentures, mortgages, loan agreements,
letters of credit and surety bonds, capital leases, security agreements
and other agreements or commitments (including any assumptions or
guarantees thereof) for the borrowing of money or the subjecting of any
assets to an Encumbrance (other than Permitted Encumbrances);
(ii) purchase or sales orders and other contracts
for the sale of goods, raw materials, supplies, products or other
personal property, or for the furnishing of services, excluding any
such orders or contracts involving payments of less than one million
dollars ($1,000,000) from any Person in any calendar year;
(iii) contracts involving the expenditure of more
than one million dollars ($1,000,000) to any Person in any calendar
year for the purchase of material, supplies, equipment, other personal
property or services; excluding any thereof that are terminable by the
Seller without penalty on not more than ninety (90) calendar days
notice or are related to owned or leased real property;
(iv) contracts not otherwise described in this
Section 2.13(a) that individually (or as a group of related contracts)
involve consideration of more than one million dollars ($1,000,000) in
any calendar year, excluding any thereof that are terminable by the
Seller without penalty on not more than ninety (90) calendar days
notice or are related to owned or leased real property, and contracts
entered into outside of the ordinary course of business;
(v) guarantees of obligations of third parties,
excluding guarantees involving the potential expenditure by the Seller
and the Subsidiaries of less than two hundred fifty thousand dollars
($250,000) in any instance;
(vi) agreements which restrict the Seller, the
Subsidiaries or the Business from competing with any other Person or
any Person from conducting the Business in any geographic area;
(vii) contracts or agreements with directors or
officers or Affiliates (including the Owners) of the Seller or the
Subsidiaries;
(viii) agreements under which the Seller or any
of the Subsidiaries has licensed to or from any Person any material
Intellectual Property owned by the Seller or any Subsidiary or used or
held for use in the conduct of the Business (including licenses for
computer software, other than off-the-shelf software (including all
seat licenses for such software collectively) with annual license fees
of, or a total replacement cost reasonably estimated to be, less than
thirty thousand dollars ($30,000));
33
(ix) partnership, limited liability company,
joint venture agreements or other similar agreements;
(x) contracts relating to the acquisition or
disposition of any business enterprise or the assets thereof;
(xi) any agreement (or group of related agreements)
involving annual payments to any Person in excess of two hundred fifty
thousand dollars ($250,000) for the lease of personal property;
(xii) any profit sharing, deferred compensation,
severance, termination, retention or other similar plan, agreement or
arrangement for the benefit of any Employee or Former Employee (other
than the Benefit Plans and Foreign Plans and other than any retention
plan, agreement or arrangement that does not survive the Closing);
(xiii) any agreement for the employment of any
individual on a consulting or other similar basis providing anticipated
annual compensation or severance benefits in excess of one hundred
thousand dollars ($100,000);
(xiv) any distribution, dealer, representative or
sales agency agreement with anticipated sales in excess of one million
dollars ($1,000,000);
(xv) any labor agreement (including any side
agreements thereto) with any union or recognized collective bargaining
agent;
(xvi) any agreement otherwise material to the
Business, or under which the consequences of a default or termination
has had, or would reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect or a material adverse effect
on the value to the Buyer, or the possession, use, occupancy or
operation of any material portion of the Business or the Acquired
Assets.
(b) Except for Excluded Contracts with the Owners or their
Affiliates that do not relate to the Acquired Assets or Assumed Liabilities,
true and complete copies (with all amendments and modifications) of each of
the written Material Contracts, and a written summary setting forth the
terms and conditions of each oral Material Contract, have been made
available to the Buyer.
(c) Except as set forth in Section 2.13(c) of the Disclosure
Schedule, with respect to each Contract (other than an immaterial Contract)
that is an Acquired Asset or Assumed Liability (whether or not disclosed or
otherwise required to be disclosed in Section 2.13(a) of the Disclosure
Schedule), (i) the Contract is a valid and binding agreement of the Seller
or the applicable Subsidiary, enforceable against the Seller or the
applicable Subsidiary, and to the Knowledge of the Seller each of the other
parties thereto, and in full force and effect, (ii) the Contract will be a
legal, valid and binding agreement of the Buyer enforceable against the
Buyer, and to the Knowledge of the Seller each of the other parties thereto,
and in full force and effect on
34
identical terms following the consummation of the transactions contemplated
hereby, (iii) the Seller, and to the Knowledge of the Seller, each of the
other parties thereto, have performed in all material respects all
obligations required to be performed by them thereunder and are not in
breach or default thereunder, (iv) no condition exists or event has occurred
that (whether with or without notice or lapse of time or both) would
constitute a breach or default of the Seller or a Subsidiary, or to the
Knowledge of the Seller, any other party thereto, or permit termination,
modification, or acceleration thereunder and (v) the Seller or the
applicable Subsidiary has not, and to the Knowledge of the Seller, no other
party thereto, has repudiated or threatened to repudiate any provision
thereof.
(d) Except as set forth in Section 2.13(d) of the Disclosure
Schedule, to the Knowledge of the Seller, no Monsanto Supply Agreement
Environmental Costs have arisen since December 31, 2004.
2.14 Environmental Matters.
---------------------
Except (x) as set forth in Section 2.14 of the Disclosure
Schedule, (y) with respect to any Excluded Assets or (z) as would not
reasonably be expected to result in a Material Adverse Effect:
(a) The Seller, the Subsidiaries and, to the Knowledge of the
Seller, Fosbrasil hold and are in compliance with all Environmental Permits,
all of such Environmental Permits are in full force and effect and there are
no Proceedings pending, or to the Knowledge of the Seller, threatened that
seek revocation, cancellation, suspension or any adverse modification of
such Environmental Permits.
(b) All such material Environmental Permits (including any
pending application therefor) are listed in Section 2.14 of the Disclosure
Schedule, and any that are not transferable are so designated.
(c) The Seller, the Subsidiaries and, to the Knowledge of the
Seller, Fosbrasil have made timely application for renewals of all such
Environmental Permits to the extent required by Environmental Laws and, to
the Knowledge of Seller, to the extent otherwise necessary for continued use
of the Acquired Assets and operation of the Business as used or operated as
of the Closing Date.
(d) The Seller, the Subsidiaries and, to the Knowledge of the
Seller, Fosbrasil are not in violation of Environmental Laws in connection
with the Business and the Acquired Assets and, since the Formation Date,
have not been in violation of Environmental Laws in connection with the
Acquired Assets or the Business.
(e) No unresolved written notice (including any notice of
investigations or reviews), citation, request for information, claim,
demand, summons or order has been received or, to the Knowledge of the
Seller, threatened by any Governmental Authority or other entity: (i) with
respect to any alleged violation of any Environmental Law in connection with
the Business or the Acquired Assets; or (ii) with respect to any alleged
failure to have any Environmental Permit required for the Business or the
Acquired Assets; or (iii) in connection with the Business or the Acquired
Assets, with respect to any use, possession, generation, treatment, storage,
35
recycling, transportation or disposal (collectively "Management") or
----------
exposure of or to any Hazardous Materials; or (iv) with respect to any
allegation that the Seller, any Subsidiary or any Owner is or may be
potentially responsible with respect to any investigation or clean-up of any
threatened or actual Release of any Hazardous Material in connection with
the Business or the Acquired Assets.
(f) Neither the Seller nor any Subsidiary nor any Owner has
arranged, directly or by delegation to a third party, for the disposal of
any Hazardous Material in connection with the Business or Acquired Assets at
any site which is listed or, to Knowledge of the Seller, proposed for
listing on the National Priorities List promulgated pursuant to CERCLA, on
CERCLIS or on any similar state list, the circumstances of which listing
would reasonably be expected to result in Proceedings or a claim against the
Seller or the Buyer under Environmental Laws for clean-up costs, remedial
work or damages to natural resources.
(g) No Hazardous Material has been Released by the Seller or
any Subsidiary or any Owner or, to the Knowledge of the Seller, by anyone
else at, on, about or under any Real Property, which Release would require
an investigation, remediation or other response actions pursuant to
Environmental Law. No such Real Property is listed or, to the Knowledge of
the Seller, proposed for listing on the National Priority List promulgated
pursuant to CERCLA, on CERCLIS or on any similar state list of sites
requiring investigation or clean-up.
(h) There are no environmental Encumbrances on any Real
Property, and no government action is, to the Knowledge of the Seller,
pending which would reasonably be expected to subject any of such Real
Property to such Encumbrances. The Seller is not required to place,
currently, nor to the Knowledge of the Seller, in connection with Closing
any notice or restriction relating to the presence of Hazardous Material in
the deed to any Real Property, and no Real Property has such notice or
restriction in its deed.
(i) The Seller, the Subsidiaries, the Owners and, to the
Knowledge of the Seller, Fosbrasil have made available to the Buyer all
non-privileged, written material environmental inspections, investigations,
studies, audits, tests, reviews and other analyses conducted in relation to
the Real Property, other Acquired Assets or the Business, which are in the
possession, custody or control of the Seller, Fosbrasil, the Owners or their
respective Affiliates.
(j) Notwithstanding any other provision of this Agreement to
the contrary, the representations and warranties included in this Section
2.14 shall constitute the sole and exclusive representations and warranties
of the Seller relating to environmental matters, including any matters
arising under Environmental Laws or related to Hazardous Materials.
2.15 Insurance.
---------
Section 2.15 of the Disclosure Schedule lists the policies
and contracts in effect for insurance covering the Acquired Assets. Such
policies insure against risks of a character and in such amounts as are
usually insured against by similarly situated companies in the same or
similar businesses. All such insurance policies are in full force and
effect, all premiums due thereon have been paid and the Seller and its
Affiliates, as applicable, have complied in all material respects with the
provisions of such policies and have not received any written notice
36
from any of their insurance brokers or carriers that such broker or carrier
has cancelled or terminated coverage or will not be willing or able to renew
their existing policies.
2.16 Real Property.
-------------
(a) Leased Properties. Section 2.16(a) of the Disclosure
-----------------
Schedule sets forth a complete list and the location of all real property
leased or subleased, whether as landlord or tenant, by the Seller or the
Subsidiaries, excluding the Excluded Facilities (the "Leased Real
-----------
Property"), identifying the parties thereto. The Seller has prior to the
--------
date hereof made available to the Buyer correct and complete copies of the
leases and subleases (and all amendments, supplements, side letters,
estoppels, subordination, nondisturbance and attornment agreements, and
other written agreements related thereto) that are in the Seller's
possession (collectively, the "Leases") covering the properties listed in
------
Section 2.16(a) of the Disclosure Schedule (as amended to the date of this
Agreement) and all material licenses, certificates of occupancy, plans,
specifications and permits pertaining to the Leased Real Property that are
in the possession of the Seller, any of the Subsidiaries or the Owners.
Except (x) as otherwise specified in Section 2.16(a) of the Disclosure
Schedule or (y) where the failure of any of the following to be true and
correct does not have, or would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect:
(i) (A) neither the Seller nor any of the
Subsidiaries, nor to the Knowledge of the Seller, any of their
landlords or tenants, as the case may be, is in default under any Lease
beyond any applicable notice, grace or cure period, (B) neither the
Seller nor any of the Subsidiaries has received or delivered a written
notice of default or objection to any party to any Lease to pay and
perform its obligations and (C) to the Knowledge of the Seller, no
event with respect to any Lease which with either notice or the passage
of time or both would reasonably be expected to become an event of
default thereunder;
(ii) no Lease has been assigned, sublet, mortgaged,
deeded in trust or otherwise encumbered by the Seller or any of the
Subsidiaries; and
(iii) (A) the Leases constitute all written and oral
agreements of any kind for the leasing, rental, use or occupancy of the
Leased Real Property and are the result of bona fide arms length
negotiations between the parties, (B) no third party has the right to
cancel or terminate a Lease; and (C) there are no refunds, credits,
concessions, bonuses, free months' rental, rebates, finish-out
allowances in excess of the building's standard or other agreements or
matters affecting the rental for any tenant under any Lease nor any
additional payments, accommodations, consideration or unpaid tenant
improvement costs due under any of the Leases.
(b) Owned Properties. Section 2.16(b) of the Disclosure Schedule
----------------
lists all real property owned by the Seller or the Subsidiaries, other than
Excluded Facilities (the "Owned Real Property"), identifying the owner
-------------------
thereof.
37
(c) Real Property.
-------------
(i) With respect to the Real Property, the Seller
has previously made available or delivered to the Buyer copies of the
following: (A) all title insurance policies or commitments that were
delivered to the Seller or any of their Subsidiaries by any title
insurance company in connection with the Seller's or any of the
Subsidiaries' investigation, acquisition financing, or refinancing of
the Real Property, to the extent they are in the Seller's or any of the
Subsidiaries' or the Owners' possession; (B) all instruments, documents
or agreements referenced in the title policies that create or evidence
conditions or exceptions to title affecting the Real Property, in the
Seller's or any of the Subsidiaries' or the Owners' possession (the
"Exception Documents"); and (C) any surveys, plats or plans delivered
-------------------
to the Seller or any of the Subsidiaries in connection with the
Seller's or any of the Subsidiaries' investigation, purchase, financing
or refinancing of the Real Property, in the Seller's or any of the
Subsidiaries' possession.
(ii) The Real Property, the Seller and the
Subsidiaries are not in violation of any Encumbrances, except for any
such violation which would not reasonably be expected to individually
or in the aggregate materially impair the use or operation of the
affected property or the conduct of the Business thereon as it is
currently being used and conducted.
(iii) The Owners, the Seller and the Subsidiaries
have not received any written notice from insurers of the Real Property
relating to any material violations, defects, deficiencies, or need for
repairs.
(iv) To the Knowledge of the Seller, no fact or
condition exists which would result in the termination of the current
access from any property comprising part of the Real Property to any
presently existing highways and roads adjoining or situated on the Real
Property.
(v) Except as set forth in Section 2.16(c) of
the Disclosure Schedule, there are no encroachments or other facts or
conditions affecting any of the Real Property which would materially
interfere with the use, occupancy or operation thereof as currently
used, occupied and operated.
2.17 Product Liability.
-----------------
Except as set forth in Section 2.17(a) of the Disclosure
Schedule, to the Knowledge of the Seller, there are no (a) Liabilities,
fixed or contingent, with respect to any product liability (as distinct from
warranty claims described in clause (b) below) claim that relates to any
product manufactured and sold by the Seller or any Subsidiary to others in
the conduct of the Business or (b) Liabilities, fixed or contingent, of the
Seller or any Subsidiary, which have been asserted, with respect to any
claim for the breach of any express or implied product warranty with respect
to any product manufactured or sold by the Seller or any Subsidiary to
others in the conduct of the Business other than any claim based on standard
warranty obligations (to replace, repair or refund) made by the Seller or a
Subsidiary in the
38
ordinary course of the conduct of the Business to purchasers of its
products. Section 2.17(b) of the Disclosure Schedule sets forth the standard
warranty and return policies for the Business.
2.18 Inventory.
---------
Except as set forth on Section 2.18(a) of the Disclosure
Schedule, the Inventory of the Business as reflected on the Interim Balance
Sheet is, and the Inventory of the Business acquired after the Interim
Balance Sheet Date and before the Closing Date will be, carried at cost
determined on the basis of standard cost and of good and merchantable
quality in all material respects. Since the date of the Interim Balance
Sheet, such Inventory has been maintained in the ordinary course of business
consistent with past practice. Except as set forth on Section 2.18(b) of the
Disclosure Schedule, to the Knowledge of the Seller, neither the Seller nor
any Subsidiary is under any Liability or obligation with respect to the
return of any material Inventory in the possession of wholesalers, retailers
or other customers. Such Inventory is consistent in all material respects
(both as to amount and type) with the requirements of the Business in the
ordinary course consistent with past practice.
2.19 Accounts Receivable.
-------------------
Except as set forth in Section 2.19 of the Disclosure Schedule,
the accounts receivable of the Business included in Working Capital in the
Conclusive Net Working Capital and Capex Statement as of the Closing Date:
(a) will be valid and genuine; (b) will have arisen solely out of bona fide
sales and deliveries of goods, performance of services and other business
transactions in the ordinary course of business consistent with past
practice; (c) will not be subject to any material valid defenses, set-offs
or counterclaims; and (d) will be reasonably expected to be collectible in
the ordinary course of business consistent with past practice (net of any
reserve for doubtful accounts set forth in Working Capital in the Conclusive
Net Working Capital and Capex Statement).
2.20 Relationship with Customers and Suppliers.
-----------------------------------------
Section 2.20 of the Disclosure Schedule sets forth a true and
complete list of the twenty (20) largest customers (by net sales) and
twenty (20) largest suppliers (by dollar volume) of the Business for the
fiscal year ended December 31, 2004 and for the six-month period ended June
30, 2005. To the Knowledge of the Seller, no written or oral communication
has been received and no dispute exists, which would lead a Person
reasonably to believe that any current customer which accounted for more
than five percent (5%) of the net sales of the Business for the immediately
preceding twelve (12) month period (including, for this purpose, any
Affiliate) or any current supplier to the Seller or any Subsidiary of items
material to the Business, which items cannot be replaced at comparable cost
and the loss of which would reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect, will terminate or materially
and adversely modify its business relationship with the Seller or such
Subsidiary.
2.21 Absence of Questionable Payments.
--------------------------------
Except as set forth in Section 2.21 of the Disclosure Schedule,
neither the Seller nor any Subsidiary nor, to the Knowledge of the Seller,
any of the directors, officers, agents or employees of the Seller or the
Subsidiaries or any other Persons acting on their behalf has, in
39
connection with the operation of the Business, used any corporate or other
funds for contributions, payments, gifts or entertainment, made any
expenditures relating to political activity to government officials or
accepted or received any contributions, payments or gifts, in each case in
violation of Section 104 of the Foreign Corrupt Practices Act of 1977, as
amended, or any other applicable foreign, federal or state Law.
2.22 Solvency.
--------
The Seller is now Solvent and immediately after giving effect to
the consummation of the transactions contemplated by this Agreement will be
Solvent. As used herein, the term "Solvent" shall mean, at any time with
-------
respect to the Seller, that at such time the Seller (a) is able to pay its
debts as they mature and has (and has a reasonable basis to believe it will
continue to have) sufficient capital (and not unreasonably small capital) to
carry on its business consistent with its past practices, and (b) the assets
and properties of the Seller at a fair valuation are greater than its debts
and other liabilities, including subordinated and contingent liabilities
computed at the amount which, such Person has a reasonable basis to believe,
represents an amount which can reasonably be expected to become an actual or
matured liability.
2.23 All Assets.
----------
The Acquired Assets, together with the Transaction Documents,
constitute all of the assets, rights, contracts and other properties
necessary for the Buyer to operate the Business in all material respects in
the manner as it is now being conducted by the Seller and the Subsidiaries.
Except for Excluded Assets and as contemplated by the Sauget Supply
Agreement and the Transition Services Agreement, there are no material
assets or properties used in the operation of the Business and owned by any
Person other than the Seller that will not be leased or licensed to the
Buyer under valid, current leases or license arrangements, subject to any
consents listed in Section 2.4 of the Disclosure Schedule.
2.24 No Brokers' or Other Fees.
-------------------------
Neither the Seller nor the Owners nor any of their respective
Affiliates have made any agreement or taken any other action which might
cause any Person to become entitled to a broker's or finder's fee or
commission as a result of the transactions contemplated hereunder, which
could result in liability to the Buyer or ICL or any of their respective
Affiliates.
2.25 No Other Representations or Warranties.
--------------------------------------
Except for the representations and warranties contained in
this Article II or expressly contained in this Agreement or any other
Transaction Document, neither the Owners, the Seller or any other Person
makes any other express or implied representation or warranty, including
with respect to any financial information of the Owners, the Seller, the
Subsidiaries, Fosbrasil or Astaris Production LLC, other than to the extent
specifically set forth in this Agreement and the Disclosure Schedule, to the
Buyer. Notwithstanding anything herein to the contrary, but without
limitation of any representation or warranty, stipulation, estoppel,
certification or agreement of the Seller or the Owners expressly contained
in this Agreement, any other Transaction Document, or the certificate under
Section 6.3 to be delivered to the Buyer and ICL, THE SELLER AND OWNERS MAKE
NO OTHER (AND HEREBY DISCLAIM EACH
40
OTHER) REPRESENTATION, WARRANTY OR GUARANTY WITH RESPECT TO THE VALUE,
CONDITION OR USE OF THE ACQUIRED ASSETS (INCLUDING WITHOUT LIMITATION
ENVIRONMENTAL CONDITION), WHETHER EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE OWNERS
Each Owner, severally and not jointly, hereby represents and warrants
to the Buyer and ICL, as of the date of this Agreement, as follows:
3.1 Organization of the Owners.
--------------------------
(a) With respect to FMC, FMC is a corporation duly
incorporated, validly existing and in good standing under the Laws of the
State of Delaware. FMC has all requisite corporate power and authority to
own, lease and operate its assets and to carry on its business as now being
conducted and is qualified or licensed to do business and is in good
standing in the jurisdictions in which the ownership or leasing of its
property or the conduct of its business requires such qualification or
license, except jurisdictions in which the failure to be so qualified or
licensed does not have, or would not reasonably be expected to have,
individually or in the aggregate, a material adverse effect on the ability
of FMC to perform its obligations under, and to consummate the transactions
contemplated by, this Agreement and the Transaction Documents to which FMC
is a party.
(b) With respect to Solutia, Solutia is a corporation duly
incorporated, validly existing and in good standing under the Laws of the
State of Delaware and, pursuant to Sections 1107 and 1008 of the Bankruptcy
Code and the orders of the Bankruptcy Court, has all requisite corporate or
similar power and authority to own, lease and operate its assets and to
carry on its business as now being conducted and is qualified or licensed to
do business and is in good standing in the jurisdictions in which the
ownership or leasing of its property or the conduct of its business requires
such qualification or license, except jurisdictions in which the failure to
be so qualified or licensed does not have, or would not reasonably be
expected to have, individually or in the aggregate, a material adverse
effect on the ability of Solutia to perform its obligations under, and to
consummate the transactions contemplated by, this Agreement and the
Transaction Documents to which Solutia is a party.
3.2 Authorization, Etc.
------------------
(a) In the case of FMC, (i) FMC has full corporate power and
authority to execute and deliver this Agreement and the Transaction
Documents to which it is a party and to carry out and consummate the
transactions contemplated hereby and thereby to be carried out and
consummated by it and (ii) this Agreement and the Transaction Documents to
which FMC is a party have been duly and validly authorized by FMC and no
other corporate action or proceeding
41
by FMC is necessary to authorize the execution, delivery and performance of
this Agreement and the Transaction Documents by FMC.
(b) In the case of Solutia, subject to the Approval Order
(with respect to the matters not covered by the Initial Relief Order) having
been entered and still being in effect and not subject to any stay pending
appeal at the time of the Closing, (i) Solutia has full corporate power and
authority to execute and deliver this Agreement and the Transaction
Documents to which it is a party and to carry out and consummate the
transactions contemplated hereby and thereby to be carried out and
consummated by it and (ii) this Agreement and the Transaction Documents to
which Solutia is a party have been duly and validly authorized by Solutia
and no other corporate action or proceeding by Solutia is necessary to
authorize the execution, delivery and performance of this Agreement and the
Transaction Documents by Solutia.
(c) This Agreement has been duly and validly executed by such
Owner and, assuming this Agreement constitutes the legal, valid and binding
agreement of ICL, the Buyer, the Seller and the other Owner, and, with
respect to Solutia, assuming the entry of the Approval Order as a Final
Order, it constitutes a legal, valid and binding agreement of such Owner,
enforceable against such Owner in accordance with its terms. As of the
Closing, each Transaction Document will be duly and validly executed by such
Owner (to the extent such Owner is a party thereto) and, assuming such
Transaction Document constitutes the legal, valid and binding agreement of
the ICL, Buyer the Seller and/or the other Owner (to the extent they are a
party thereto), will constitute a legal, valid and binding agreement of such
Owner (to the extent such Owner is a party thereto), enforceable against
such Owner in accordance with its terms.
3.3 No Approvals or Conflicts.
-------------------------
Except as set forth in Section 3.3 of the Disclosure Schedule and,
in the case of Solutia, subject to the Approval Order (with respect to the
matters not covered by the Initial Relief Order) having been entered and
still being in effect and not subject to any stay pending appeal at the time
of the Closing, the execution, delivery and performance by such Owner of
this Agreement and the consummation by such Owner of the transactions
contemplated hereby to be consummated by it will not (i) violate, conflict
with or result in a breach by such Owner of any provision of any charter,
bylaws or equivalent formation or governance document of such Owner, (ii)
violate, conflict with or result in a breach of any provision of, or
constitute a default by such Owner (or create an event which, with notice or
lapse of time or both, would constitute such a default) or give rise to any
right of termination, cancellation, modification or acceleration of or
under, or result in the creation of any Encumbrance upon any of the Acquired
Assets or give to others any interests or rights therein under, any material
note, bond, mortgage, indenture, deed of trust, license, franchise, permit,
lease, contract, agreement or other instrument or understanding to which
such Owner is a party, or by which the Business or any of the Acquired
Assets may be bound or subject, (iii) violate, conflict with or result in a
breach of, any Law of any Governmental Authority applicable to such Owner or
any of its properties or the Business, or (iv) except for applicable
requirements of the HSR Act or any other Competition/Investment Law, and
except for reports to be filed under the Exchange Act, require any material
order, Consent, clearance, approval or authorization of, or notice to, or
declaration, filing, application, qualification or registration with, any
Governmental Authority or other Person, except in each case with respect to
subclauses (ii), (iii) and (iv), where such violation, conflict, breach,
default,
42
right, Encumbrance or requirement does not have, or is not reasonably
expected to have, individually or in the aggregate, a Material Adverse
Effect or a material adverse effect on the ability of such Owner to
consummate the transactions contemplated by this Agreement or the
Transaction Documents without material delay.
3.4 Litigation.
----------
Except as set forth in Section 3.4 of the Disclosure Schedule,
subject to the Approval Order having been entered and still being in effect
and not subject to any stay pending appeal at the time of the Closing, there
are no Proceedings pending or, to the actual knowledge of such Owner after
reasonable inquiry, threatened against such Owner or any of their respective
subsidiaries (or any of their material assets) before any arbitrator, court
or Governmental Authority and such Owner and its subsidiaries have not
received any notice that they are subject to any decree, order or judgment,
in each case, which has, or would reasonably be expected to have,
individually or in the aggregate, a material adverse effect on the ability
of such Owner to consummate the transactions contemplated by this Agreement
or the Transaction Documents without material delay.
3.5 No Brokers' or Other Fees.
-------------------------
Neither the Owners nor any of their respective Affiliates have made
any agreement or taken any other action which might cause any Person to
become entitled to a broker's or finder's fee or commission as a result of
the transactions contemplated hereunder, which could result in liability to
the Buyer or ICL or any of their respective Affiliates.
3.6 No Other Representations or Warranties.
--------------------------------------
Except for the representations and warranties expressly contained
in this Agreement or any other Transaction Document, neither Owner makes any
other express or implied representation or warranty to ICL or the Buyer.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BUYER AND ICL
The Buyer and ICL hereby jointly and severally represent and warrant
to the Seller and the Owners, as of the date of this Agreement, as follows:
4.1 Organization.
------------
The Buyer is a corporation duly organized, validly existing and in
good standing under the Laws of the jurisdiction of its incorporation. ICL
is an Israeli corporation duly organized, validly existing and in good
standing under the Laws of the jurisdiction of its incorporation.
43
4.2 Authorization, Etc.
------------------
Each of the Buyer and ICL has full corporate power and authority
to execute and deliver this Agreement and the Transaction Documents to which
it is a party and to carry out and consummate the transactions contemplated
hereby and thereby to be carried out and consummated by it. This Agreement
and the Transaction Documents to which the Buyer is a party have been duly
and validly authorized by the Buyer and no other corporate action or
proceeding by the Buyer is necessary to authorize the execution, delivery or
performance of this Agreement and the Transaction Documents by the Buyer.
This Agreement and the Transaction Documents to which ICL is a party have
been duly and validly authorized by ICL and no other corporate action or
proceeding by ICL is necessary to authorize the execution, delivery or
performance of this Agreement and the Transaction Documents by ICL. This
Agreement has been duly and validly executed by each of the Buyer and ICL
and, assuming this Agreement constitutes the legal, valid and binding
agreement of each of the Owners and the Seller, constitutes a legal, valid
and binding agreement of the Buyer and ICL, enforceable against the Buyer
and ICL in accordance with its terms. As of the Closing, each Transaction
Document will be duly and validly executed by the Buyer and ICL (to the
extent the Buyer or ICL, as applicable, is a party thereto) and, assuming
such Transaction Document constitutes the legal, valid and binding agreement
of each of the Owners and the Seller, will constitute a legal, valid and
binding agreement of the Buyer and ICL (to the extent the Buyer or ICL, as
applicable, is a party thereto), enforceable against the Buyer or ICL (as
applicable) in accordance with its terms.
4.3 No Approvals or Conflicts.
-------------------------
The execution, delivery and performance by the Buyer and ICL of
this Agreement and the consummation by the Buyer and ICL of the transactions
contemplated hereby to be consummated by each of them will not (i) violate,
conflict with or result in a breach by the Buyer or ICL of any provision of
the certificate of incorporation, bylaws or equivalent formation or
governance document of the Buyer or ICL, (ii) violate, conflict with or
result in a breach of any provision of, or constitute a default by the Buyer
or ICL (or create an event which, with notice or lapse of time or both,
would constitute such a default) or give rise to any right of termination,
cancellation, modification or acceleration of or under, or result in the
creation of any Encumbrance upon any of the Buyer's or ICL's properties or
give to others any interests or rights therein under, any material note,
bond, mortgage, indenture, deed of trust, license, franchise, Permit, lease,
contract, agreement or other instrument or understanding to which the Buyer
or ICL or any of their respective properties may be bound or subject, (iii)
violate, conflict with, or result in a breach of any Law of any Governmental
Authority applicable to the Buyer, ICL or any of their respective properties
or (iv) except for applicable requirements of the HSR Act or any other
Competition/Investment Law, and except for reports to be filed under the
Exchange Act or foreign securities Laws, require any material order,
Consent, clearance, approval or authorization of, or notice to, or
declaration, filing, application, qualification or registration with, any
Governmental Authority, or other Person, except in each case with respect to
subclauses (ii), (iii) and (iv), where such violation, conflict, breach,
default, right, Encumbrance or requirement does not have, or is not
reasonably expected to have, individually or in the aggregate, a material
adverse effect on the ability of the Buyer to consummate the transactions
contemplated by this Agreement or the Transaction Documents without material
delay.
44
4.4 Financial Capacity.
------------------
The Buyer will on the scheduled Closing Date have cash on hand
sufficient to pay all amounts which may be payable by it at the Closing
pursuant to this Agreement.
4.5 Litigation.
----------
There are no Proceedings pending or, to the actual knowledge of
the Buyer or ICL after reasonable inquiry, threatened against the Buyer or
ICL or any of their respective subsidiaries (or any of their material
assets) before any arbitrator, court or Governmental Authority and neither
the Buyer nor ICL nor any of their respective subsidiaries have received any
notice that any of them are subject to any decree, order or judgment, in
each case, which has, or would reasonably be expected to have, individually
or in the aggregate, a material adverse effect on the ability of the Buyer
or ICL or their designated Affiliates or permitted assigns to consummate the
transactions contemplated by this Agreement or the Transaction Documents
without material delay.
4.6 No Brokers' or Other Fees.
-------------------------
Neither the Buyer nor ICL nor any of their respective Affiliates
have made any agreement or taken any other action which might cause any
Person to become entitled to a broker's or finder's fee or commission as a
result of the transactions contemplated hereunder, which could result in
liability to the Seller or Owners or any of their respective Affiliates.
4.7 No Other Representations or Warranties.
--------------------------------------
Except for the representations and warranties expressly contained
in this Agreement or any other Transaction Document, neither the Buyer nor
ICL makes any other express or implied representation or warranty to the
Seller or the Owners.
ARTICLE V
CONDITIONS TO SELLER'S AND OWNERS' OBLIGATIONS
The obligations of the Seller and the Owners to effect the Closing
under this Agreement is subject to the satisfaction, at or prior to the
Closing, of each of the following conditions, unless validly waived in
writing by the Seller and each of the Owners.
5.1 Representations and Warranties.
------------------------------
The representations and warranties of ICL or the Buyer or both
contained in this Agreement that are qualified as to materiality shall be
true and correct and the representations and warranties of the Buyer or ICL
or both set forth in this Agreement and that are not so qualified shall be
true and correct in all material respects, in each case on the date of this
Agreement and on the Closing Date as though made on the Closing Date
(irrespective of any notice delivered to the Seller or the Owners after the
date hereof), except those representations and warranties that address
matters only as of a particular date or only with respect to a specific
period of time, which need only be true and correct (or true and correct in
all material respects,
45
as applicable) as of such date or with respect to such period; provided,
--------
however, that a breach of any of the foregoing representations and
-------
warranties shall not constitute the non-fulfillment of the foregoing
condition (x) if such breach is capable of cure, and such breach is actually
cured, by the earlier of (A) thirty (30) calendar days after written notice
thereof from the Seller (provided that such thirty (30) day period shall be
--------
extended for so long as any other condition set forth in this Article V
shall not have been satisfied or waived) and (B) the Outside Date or (y)
unless such breach has, or would reasonably be expected to have,
individually or in the aggregate with all other breaches, a material adverse
effect on the ability of the Buyer to consummate the transactions
contemplated by this Agreement and the Transaction Documents without
material delay.
5.2 Performance.
-----------
ICL and the Buyer shall have performed and complied in all
material respects with all agreements and obligations required by this
Agreement to be so performed or complied with by it prior to the Closing.
5.3 Officer's Certificate.
---------------------
ICL and the Buyer shall have delivered to the Seller and each
Owner a certificate, dated as of the Closing Date and executed by an
executive officer of ICL and the Buyer, certifying to the fulfillment of the
conditions specified in Sections 5.1 and 5.2 hereof.
5.4 Consents and Approvals.
----------------------
Each Consent listed in Section 5.4 of the Disclosure Schedule
shall have been obtained (and the Seller shall have received reasonable
evidence thereof), and all conditions relating to such Consents shall have
been satisfied, and such Consents shall not have expired or been withdrawn
as of the Closing.
5.5 Bankruptcy Approvals.
--------------------
The United States Bankruptcy Court for the Southern District of
New York or any other court having jurisdiction over Solutia with respect to
Solutia's proceedings under Chapter 11 of the United States Bankruptcy Code
(the "Bankruptcy Court") shall have entered the Approval Order.
----------------
5.6 Injunctions.
-----------
On the Closing Date there shall not be in effect any applicable
Law or any applicable judgment, order, writ, injunction, decree,
stipulation, agreement, determination or award entered or issued by or with
any Governmental Authority (each, a "Governmental Order") which restrains,
------------------
prohibits or declares illegal the consummation of the transactions
contemplated by this Agreement and no Governmental Authority of competent
jurisdiction shall have instituted a Proceeding seeking to impose any such
restraint or prohibition, in each case which has not been withdrawn or
terminated.
46
5.7 Documents.
---------
ICL and the Buyer shall have delivered to Solutia the Sauget
Supply Agreement substantially in the form of Exhibit J. ICL and the Buyer
---------
shall have delivered all of the certificates, instruments, contracts and
other documents specified to be delivered by it hereunder (including
applicable Transaction Documents).
5.8 Opinion of Buyer's and ICL's Counsel.
------------------------------------
The Seller and Owners shall have received from counsel to the
Buyer and ICL opinions dated the Closing Date, in the forms set forth in
Exhibit K hereto.
---------
ARTICLE VI
CONDITIONS TO THE BUYER'S AND ICL'S OBLIGATIONS
The obligation of the Buyer and ICL to effect the Closing under
this Agreement is subject to the satisfaction, at or prior to the Closing,
of each of the following conditions, unless validly waived in writing by the
Buyer or ICL.
6.1 Representations and Warranties.
------------------------------
The representations and warranties of the Seller and each of the
Owners contained in this Agreement that are qualified as to materiality
shall be true and correct and the representations and warranties of the
Seller and each of the Owners set forth in this Agreement and that are not
so qualified shall be true and correct in all material respects, in each
case on the date of this Agreement and on the Closing Date as though made on
the Closing Date (irrespective of any notice delivered to the Buyer after
the date hereof), except those representations and warranties that address
matters only as of a particular date or only with respect to a specific
period of time, which need only be true and correct (or true and correct in
all material respects, as applicable) as of such date or with respect to
such period; provided, however, that a breach of any of the foregoing
-------- -------
representations and warranties shall not constitute the non-fulfillment of
the foregoing condition (x) if such breach is capable of cure, and such
breach is actually cured, by the earlier of (A) thirty (30) calendar days
after written notice thereof from the Buyer (provided that such thirty (30)
--------
day period shall be extended for so long as any other condition set forth in
this Article VI shall not have been satisfied or waived) and (B) the Outside
Date or (y) unless such breach has, or would reasonably be expected to have,
individually or in the aggregate with all other breaches, a Material Adverse
Effect.
6.2 Performance.
-----------
Each of the Owners and the Seller shall have performed and
complied in all material respects with all agreements and obligations
required by this Agreement to be so performed or complied with by it at or
prior to the Closing.
47
6.3 Officer's Certificates.
----------------------
Each of the Owners and the Seller shall have delivered to the
Buyer a certificate, dated as of the Closing Date and executed by one of its
executive officers, certifying to the fulfillment by it of the conditions
specified in Sections 6.1 and 6.2 hereof to be fulfilled by it.
6.4 Consents and Approvals.
----------------------
Each Consent listed in Section 6.4 of the Disclosure Schedule
shall have been obtained (and the Buyer shall have received reasonable
evidence thereof), and all conditions relating to such Consents shall have
been satisfied, and such Consents shall not have expired or been withdrawn
as of the Closing.
6.5 Bankruptcy Approvals.
--------------------
(a) The Bankruptcy Court shall have entered the Approval Order
by the applicable deadline set forth in Section 7.10 of this Agreement.
(b) The Approval Order shall have become a Final Order by the
applicable deadline set forth in Section 7.10 of this Agreement.
6.6 Injunctions.
-----------
On the Closing Date there shall not be in effect any applicable
Law or applicable Governmental Order which restrains, prohibits or declares
illegal the consummation of the transactions contemplated by this Agreement
or that would limit or adversely affect, except to the extent provided in
Section 7.3(b) hereof, the Buyer's ownership of all or any material portion
of the Acquired Assets, and no Governmental Authority of competent
jurisdiction shall have instituted a Proceeding seeking to impose any such
restraint or prohibition, in each case which has not been withdrawn or
terminated.
6.7 Releases.
--------
The Acquired Assets shall have been released from any and all
Encumbrances (other than Permitted Encumbrances), including the Encumbrances
set forth in Sections 1.3(b)(xiv) and 2.1(d) of the Disclosure Schedule, and
the Buyer shall have received reasonable evidence thereof.
6.8 Permits.
-------
Each Permit listed in Section 6.8 of the Disclosure Schedule shall
have been obtained for the Buyer's use (and the Seller shall have furnished
to the Buyer reasonable evidence thereof), and all conditions relating to
such Permits shall have been satisfied, and such Permits shall not have
expired or been withdrawn as of the Closing.
48
6.9 No Material Adverse Effect.
--------------------------
No Material Adverse Effect shall have occurred, nor shall any
event or circumstance have occurred which would reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
6.10 Documents.
---------
Solutia shall have delivered to the Buyer the Sauget Supply
Agreement substantially in the form of Exhibit J. The Seller and each Owner
---------
shall have delivered all of the certificates, instruments, contracts and
other documents specified to be delivered by it hereunder (including
applicable Transaction Documents).
6.11 Opinion of Seller's and Owners' Counsel.
---------------------------------------
The Buyer and ICL shall have received from counsel to the Seller
and each Owner opinions dated the Closing Date, in the forms set forth in
Exhibit L hereto.
---------
ARTICLE VII
COVENANTS AND AGREEMENTS
7.1 Conduct of Business by the Seller.
---------------------------------
Except (i) as contemplated by this Agreement or the Transaction
Documents, (ii) as provided in Section 7.1 of the Disclosure Schedule or
(iii) as required by a Governmental Authority of competent jurisdiction or
by applicable Law, the Seller covenants that it shall, and shall cause the
Subsidiaries to, and each Owner covenants that it shall cause the Seller and
the Subsidiaries to, absent the prior written consent of the Buyer to the
contrary, which consent shall not be unreasonably withheld or delayed, from
and after the date of this Agreement and until the Closing Date, except in
the case of Solutia to the extent limitations are imposed on Solutia as a
result of Solutia having filed a petition for relief under the Bankruptcy
Code:
(a) use commercially reasonable efforts consistent with good
business judgment to (i) operate the Business in the ordinary course of
business consistent with past practice, (ii) conduct, carry on, maintain and
preserve intact the Business, (iii) maintain its relationships with
licensors, suppliers, creditors, distributors, customers, key employees and
others having business relationships with the Business in the ordinary
course of business consistent with past practice, (iv) maintain the Acquired
Assets, as well as books of account, records and files related to the
conduct of the Business and Employees, all in the ordinary course of
business and consistent with past practice and to make the same available in
all material respects to the Buyer as of the Closing, (v) maintain the
Inventory and insurance of the Business at levels that are in the ordinary
course of business and consistent with past practice, (vi) comply in all
material respects with all applicable Laws, (vii) keep available to the
Buyer the Employees and (viii) not take any action primarily for the purpose
and with the effect of increasing the Estimated Net Working Capital Excess
Amount or Final Net Working Capital Excess Amount;
49
(b) not: (i) cause to be issued or sold any debt or equity
securities of any of the Subsidiaries or issue, grant or enter into any
options, warrants, rights, subscription agreements or commitments of any
kind with respect thereto; (ii) directly or indirectly cause to be
purchased, redeemed or otherwise acquired or disposed of any equity of any
of the Subsidiaries; (iii) split, combine or reclassify any of the
outstanding capital stock or Equity Interest of any of the Subsidiaries;
(iv) adopt a plan of complete or partial liquidation, dissolution, merger,
consolidation, restructuring, recapitalization or other reorganization with
respect to any of the Subsidiaries; (v) cause the Seller or any Subsidiary
which is not, directly or indirectly, wholly owned by the Seller to declare,
set aside or pay any dividend (other than cash dividends) or other
distribution except for the distribution to its securityholders, as a
capital account reduction, of all amounts owed by either of the Owners to
the Seller or any of the Subsidiaries; (vi) incur, assume or guarantee any
Debt Obligations of the Seller or any of the Subsidiaries other than in the
ordinary course of business consistent with past practice; (vii) subject any
Acquired Assets (real, personal or mixed, tangible or intangible) to any
Encumbrance other than Permitted Encumbrances; (viii) permit or allow the
sale, lease, transfer or disposition of any assets of the Seller or any of
the Subsidiaries (real, personal or mixed, tangible or intangible) that
would otherwise constitute Acquired Assets, other than transactions in the
ordinary course of business; (ix) permit the Seller or any of the
Subsidiaries to assume, guarantee, or otherwise become responsible for the
obligations of, or make any loans or advances to, any other Person (other
than a Seller or any of the Subsidiaries); (x) waive or release any rights
of material value, or cancel, compromise, release or assign any material
Debt Obligations owed to the Seller or any of the Subsidiaries; (xi) except
for the capital expenditures set forth in Section 7.1(b) of the Disclosure
Schedule, permit the Seller or any of the Subsidiaries to make any
investment or expenditure of a capital nature either by purchase of stock or
securities, contributions to capital, property transfer or otherwise, or by
the purchase of any property or assets of any other Person; (xii) cancel or
terminate any material insurance policy naming the Seller or any of the
Subsidiaries as a beneficiary or a loss payable payee; (xiii) permit the
Seller or any of the Subsidiaries to enter into any collective bargaining
agreements, except for renewals or extensions of existing collective
bargaining agreements, and with respect to such renewals and extensions the
Seller shall keep the Buyer informed as to the status of, and shall consult
with the Buyer as to the strategy for, all such negotiations; (xiv) other
than (v) in the ordinary course of business, (w) in the case of new hires,
(x) as required by any agreement in effect as of the date hereof (including
this Agreement), or (y) as required by Law, (A) increase the compensation or
fringe benefits of any officer who is then a current Employee, (B) enter
into, terminate, adopt or materially amend any employment, change in control
or severance agreement or any other Benefit Plan with or for the benefit of
any Employee outside of the ordinary course or (C) hire any new Employee
(other than to fill a vacancy or replace a terminated Employee); (xv)
materially amend any organizational document of the Seller or any of the
Subsidiaries (other than the Joint Venture Agreement, to the extent that any
changes thereto do not have, and would not reasonably be expected to have a
material adverse effect on the Acquired Assets, Assumed Liabilities,
Business or the ability of the Seller, the Owners, the Buyer or ICL to
consummate the transactions contemplated hereby without material delay);
(xvi) make any material change in the accounting methods or practices of the
Seller or any of the Subsidiaries (other than changes required by Law or
GAAP); (xvii) enter into any contract by which the Business or any of the
assets or properties of the Business that would otherwise be Acquired Assets
would be bound or affected that restricts in any material respect the
operation of the Business or the owner or operator of the Business from
engaging in any line of business in any
50
geographic area or competing with any Person, except Contracts entered into
the ordinary course of business consistent with past practice with
distributors of the Seller's products; (xviii) enter into any partnership,
limited liability company or joint venture agreement between the Seller or
any of the Subsidiaries, on the one hand, and any other Person, on the other
hand; (xix) terminate or make any material amendment to a Material Contract;
(xx) compromise, settle, grant any waiver or release relating to, or
otherwise adjust, any right or claim or Proceeding having a value in the
aggregate in excess of one million dollars ($1,000,000), or that imposes
non-monetary relief that has, or would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, in each case
other than any Proceeding the liability in respect of which shall be assumed
or retained by the Seller, any Subsidiary, an Owner or an Affiliate of an
Owner following the Closing; (xxi) make any change to an accounting method
for Tax purposes for any Subsidiary or make any Tax election for any
Subsidiary other than in accordance with past practice, except in each case
as required in accordance with GAAP or applicable Law; or (xxii) authorize,
agree or commit to do any of the foregoing; and
(c) not take or omit to take any action which if taken or
omitted prior to the date hereof would reasonably be expected to result in
any of the occurrences or events set forth in Section 2.8 hereof.
From the date hereof until the Closing, the Seller shall advise and consult
with the Buyer regarding any material change or any proposed material change
in capital expenditures, inventory, receivables or prepaid expenses from the
applicable level specified in the Seller's 2005 forecast previously
furnished to the Buyer, reasonably promptly after Seller has Knowledge of
any such change or proposed change.
7.2 Access to Books and Records; Cooperation.
----------------------------------------
(a) Subject to any applicable confidentiality agreements,
ICL, the Buyer, each Owner and the Seller agree that from the Closing Date
and until the seventh (7th) anniversary of the Closing Date, during normal
business hours, at the cost and expense of the party requesting access and
only in such manner that does not cause unreasonable disruption of the
business of the party granting access or any of its subsidiaries, they shall
permit all such other parties and their respective counsel, accountants and
other authorized representatives to have reasonable access upon reasonable
advance notice to the officers, directors, employees, accountants and other
advisors and agents, properties, books, records, accountant work papers and
contracts in the possession of or reasonably accessible by such party and
its subsidiaries, and the right (at the requesting party's cost and expense)
to make copies and extracts from such books, records, accountant work papers
and contracts, in each case to the extent reasonably necessary to
investigate and defend any threatened or actual Proceeding, prepare and file
Tax Returns, and defend audits thereof, prepare financial statements and
satisfy other bona fide business needs, in each case relating to ICL, the
Buyer, the Seller, the Subsidiaries, Fosbrasil, the Acquired Assets, the
Excluded Assets, the Assumed Liabilities, the Retained Liabilities, Astaris
Production LLC and Astaris Idaho LLC prior to the Closing Date.
(b) Each party agrees not to, and to cause its subsidiaries
not to, destroy at any time any files or records which are subject to
Section 7.2(a) without giving written notice to each other party, and giving
each other party thirty (30) calendar days following receipt of such
51
notice to request in writing that all or a portion of the records intended
to be destroyed be delivered to such other party at such other party's
expense.
(c) Subject to any applicable confidentiality agreements,
during the period commencing on the date hereof and ending on the Closing
Date, the Seller will, and will cause the Subsidiaries to, and each Owner
will and will cause the Seller to, (i) upon reasonable request, afford to
the Buyer and its counsel, accountants and other authorized representatives
access at all reasonable times upon reasonable advance notice to the
officers, directors, employees, accountants and other advisors and agents of
the Seller and the Subsidiaries and the Owners, and the properties, books,
records, accountant work papers and contracts that relate to the Business,
and the right, at the Buyer's request, to make copies and extracts from such
books, records, accountant work papers and contracts, and to furnish the
Buyer with all financial, operating, environmental and other data and
information concerning the Seller or the Subsidiaries or the Business as the
Buyer and its advisors may reasonably request and (ii) authorize (and hereby
authorizes) the Buyer to, and will cooperate so that Buyer may, obtain
information concerning the Business and the Acquired Assets and Assumed
Liabilities from all Governmental Authorities; provided that the Buyer and
--------
its representatives shall not be allowed to perform any invasive or
destructive sampling or testing of structures or environmental media
(including any so-called "Phase II environmental investigations"). No
investigation or receipt of information by the Buyer pursuant to, or in
connection with, this Agreement, shall diminish or obviate any of the
representations, warranties, covenants or agreements of the Seller or the
Owners under this Agreement or the conditions to the obligations of the
Buyer under this Agreement.
(d) From and after the date hereof, each party shall, and
shall cause each of its subsidiaries and representatives to, keep
confidential and not disclose to any other Person or use except as required
in connection with the transactions contemplated by this Agreement any
information (in whatever form) of any other party reasonably considered by
such other party to be confidential or proprietary. From and after the
Closing, the Seller and each Owner shall, and shall cause each of their
respective Covered Affiliates and representatives to, keep confidential and
not disclose to any other Person or use for his, her or its own benefit
(except with respect to any Confidential Information of the Business that is
used by the Owners or their respective Covered Affiliates in the ordinary
course of their business, subject to Section 7.9) or the benefit of any
other Person any Confidential Information of the Business. The obligations
under this Section 7.2(d) shall not apply to information which (i) is or
becomes generally available to the public without breach of the commitment
provided for in this Section, (ii) is disclosed non-confidentially to the
Seller or any Owner or any of their respective Affiliates by a third party
having the right to do so after the Closing Date, (iii) is subsequently
developed after the Closing Date by employees or independent contractors of
the Seller or any Owner or any of their respective Affiliates without use of
or reference to any of the Confidential Information of the Business or (iv)
is required to be disclosed by law, order or regulation of a court or
tribunal or Governmental Authority (including the Bankruptcy Court) or any
listing agreement with any securities exchange or any securities exchange
rule or regulation, provided, however, that in any such case in this clause
-------- -------
(iv), the party from whom disclosure is required shall notify the Buyer (in
the case of Confidential Information of the Business from and after the
Closing) or the party to whom such information belongs (in any other case)
as early as possible prior to any proposed disclosure in order to enable the
Buyer or the owner of such information (as the case may be) to take
appropriate measures to preserve the confidentiality of such information,
including a protective order. At the Closing, the Seller and
52
each Owner shall assign, grant and convey to the Buyer all its rights under
any confidentiality agreement between it and Persons other than the Buyer
that were entered into in connection with or relating to a possible sale of
the Business or any part thereof, including the right to enforce all terms
of such confidentiality agreements, and shall deliver to the Buyer copies of
such confidentiality agreements; provided that if any consent or approval is
--------
necessary for the transfer of any such agreement to the Buyer and such
consent is not obtained, the Seller shall use its commercially reasonable
efforts to provide the Buyer with the rights and benefits of such agreement
in accordance with Section 1.7.
7.3 Filings and Consents.
--------------------
(a) Except as otherwise set forth in Sections 7.10 and 7.11
of this Agreement, each Owner, the Seller and each Subsidiary, on the one
hand, and ICL and the Buyer, on the other hand, shall use its commercially
reasonable efforts to obtain and to cooperate in obtaining any governmental
approval or other Permit required in connection with the execution, delivery
or performance of this Agreement or any Transaction Document. The parties
agree to cause to be made all appropriate filings under the HSR Act and any
applicable Competition/Investment Law within fifteen (15) calendar days
following the later of (i) delivery of the Consent Order Notification and
(ii) the date hereof, and to diligently pursue termination of any waiting
period under such Laws. Any such filings and supplemental information will
be in substantial compliance with the requirements of applicable Law. Each
of ICL, the Buyer, the Owners, the Seller and the Subsidiaries shall furnish
to each other party such necessary information and reasonable assistance as
the other party may request in connection with its preparation of any filing
or submission which is necessary under the HSR Act and any applicable
Competition/Investment Law. The parties shall keep each other apprised of
the status of any communications with, and inquiries or requests for
additional information from, any Governmental Authority, including the
United States Federal Trade Commission ("FTC") and the Antitrust Division of
---
the United States Department of Justice (the "Antitrust Division"), and
------------------
shall comply promptly with any such inquiry or request. Each party will use
its commercially reasonable efforts to obtain any clearance required under
the HSR Act and any applicable Competition/Investment Law for the purchase
and sale of the Acquired Assets. Notwithstanding the foregoing and subject
to Sections 7.3(b) and (c), nothing contained in this Agreement will require
or obligate ICL, the Buyer or their respective Affiliates (i) to initiate,
pursue or defend any litigation (or threatened litigation) to which any
Governmental Authority (including the Antitrust Division and the FTC) is a
party; (ii) to agree or otherwise become subject to any material limitations
on their right to (A) effectively to control or operate the Business, (B)
acquire or hold the Business, or (C) exercise full rights of ownership of
the Business or all or any material portion of the Acquired Assets; or (iii)
to agree or otherwise be required to sell or otherwise dispose of, hold
separate (through the establishment of a trust or otherwise), or divest
itself of all or any portion of the business, assets or operations of ICL,
the Buyer, any of their respective Affiliates or the Business. Each Owner
and the Seller agrees that no representation, warranty or covenant of ICL or
the Buyer in this Agreement shall be breached or deemed breached as a result
of the failure by ICL, the Buyer or any of their respective Affiliates to
take any of the actions specified in the preceding sentence.
(b) The Buyer agrees that its commercially reasonable efforts
include taking any and all steps necessary to avoid or eliminate each and
every impediment under any
53
Competition/Investment Law that is asserted by any Governmental Authority
not a United States Governmental Authority with respect to the transfer of
the Acquired Assets so as to enable the transfer of the Acquired Assets to
occur as expeditiously as possible, including proposing, negotiating,
committing to and effecting, by consent decree, hold separate order or
otherwise, the sale, divestiture or disposition of such assets or businesses
(or otherwise taking or committing to take any action that limits the
freedom of action with respect to, or its ability to retain, any businesses,
product lines or assets) as may be required in order to avoid the entry of,
or to effect the dissolution of, any injunction, temporary restraining
order, or other order in any suit or proceeding, which would otherwise have
the effect of preventing or delaying the consummation of the transfer of the
Acquired Assets.
(c) Each of the Buyer and the Seller agrees that it will, if
necessary to enable the Seller and the Buyer to consummate the transactions
contemplated by this Agreement, use commercially reasonable efforts to
defend against any suits, actions or proceedings by any U.S. Governmental
Authority seeking a temporary restraining order or preliminary injunction to
prevent consummation of the transactions contemplated by this Agreement;
provided that neither the Buyer nor the Seller shall be obligated to
--------
continue such efforts, either by pursuing an appeal or otherwise, if a
preliminary injunction preventing consummation of the transaction is
entered.
7.4 Tax Matters; Cooperation.
------------------------
(a) Each Owner, the Seller and the Buyer shall reasonably
cooperate, and shall cause its respective subsidiaries, officers, employees,
agents, auditors and other representatives reasonably to cooperate, in
preparing and filing all Tax Returns, including maintaining and making
available to each other all records necessary in connection with Taxes and
in resolving all disputes and audits with respect to all taxable periods
relating to Taxes.
(b) Notwithstanding any provision of this Agreement to the
contrary, all Transfer Taxes incurred in connection with this Agreement and
the transactions contemplated hereby shall be shared equally by the Buyer,
on the one hand, and the Seller on the other hand. The Seller and the Buyer
shall cooperate in timely making all filings, Tax Returns, reports and forms
as may be required to comply with the provisions of such tax Laws. For
purposes of this Agreement, "Transfer Taxes" shall mean transfer,
--------------
documentary, sales, use, value added, registration and other such taxes
(including all applicable real estate transfer taxes). Prior to the Closing,
the Seller shall make commercially reasonable efforts to provide, and shall
cause its subsidiaries to make commercially reasonable efforts to provide,
the Buyer with any clearance certificate or other similar document or
documents that are required by any taxing Governmental Authority, as
reasonably requested by the Buyer, to relieve the Buyer of any obligation to
withhold any portion of the Purchase Price or to relieve the Buyer of any
liability for Taxes of the Seller, the Subsidiaries or the Owners. Buyer
hereby waives any notice or notice period in connection with the Seller
obtaining such a certificate or document.
(c) ICL, the Buyer, the Seller and each Owner agrees to use,
or cause its respective Affiliates to use, the standard procedure set forth
in Rev. Proc. 2004-53 with respect to wage and employment tax reporting.
54
(d) In the case of any taxable period of a Subsidiary that
does not end on the Closing Date, the portion of the Taxes for such taxable
period that are considered allocable to the portion of such taxable period
ending on or before the Closing Date shall (i) in the case of real property,
personal property and other ad valorem Taxes, be prorated on a daily basis
and (ii) in the case of all other Taxes shall be determined on a closing of
the books basis as if such books had closed on the Closing Date.
7.5 Employee Matters.
----------------
(a) Non-Union Employees.
-------------------
(i) The Seller shall update Section 2.10(q) of the
Disclosure Schedule as of two (2) days prior to Closing. Effective as
of the Closing, the Seller shall cause the employment of each Non-Union
Employee listed on the updated Section 2.10(q) of the Disclosure
Schedule to be terminated in accordance with applicable Law. Effective
as of the Closing, the Buyer or one of its Affiliates shall extend
offers of employment to all of the Non-Union Employees (other than ▇▇▇▇
▇. ▇▇▇▇▇) terminated in accordance with the preceding sentence. Subject
to Section 7.5(a)(ii), such offers of employment shall be on such terms
and conditions as determined in the sole discretion of the Buyer. All
Non-Union Employees who accept such offer of employment are hereinafter
referred to as the "Non-Union Transferred Employees." The Seller shall
-------------------------------
update Section 2.10(r) of the Disclosure Schedule as of two (2) days
prior to Closing (the individuals set forth on such schedule on such
date, the "Non-Union Inactive Employees"). On and after the Closing,
----------------------------
the Buyer or one of its Affiliates shall honor any reemployment rights
that any Non-Union Inactive Employees would otherwise have had with
respect to the Seller prior to the Closing.
(ii) Effective as of the Closing and for one year
thereafter, the Buyer shall, or shall cause its Affiliates to, provide
compensation and employee benefits to the Non-Union Transferred
Employees (other than ▇▇▇▇ ▇. ▇▇▇▇▇) that are substantially similar, in
the aggregate, to those provided by the Seller immediately prior to the
Closing.
(b) Union Employees.
---------------
(i) The Seller shall update Section 2.10(s) of
the Disclosure Schedule as of two (2) days prior to Closing. Effective
as of the Closing, the Seller shall cause the employment of each Union
Employee listed on the updated Section 2.10(s) of the Disclosure
Schedule to be terminated in accordance with the applicable collective
bargaining agreement. Effective as of the Closing, the Buyer or one of
its Affiliates shall extend offers of employment to all of the Union
Employees terminated in accordance with the preceding sentence. The
terms and conditions of such offers of employment shall be in
accordance with the terms of the collective bargaining agreement
applicable to such Union Employee immediately prior to the Closing. All
Employees who accept such offer of employment are hereinafter referred
to as the "Union Transferred Employees." The Seller shall update
---------------------------
Section 2.10(t) of the Disclosure Schedule as of two (2) days prior to
Closing (the individuals set forth on such schedule on such date, the
"Union Inactive Employees" and, collectively with the Non-Union
------------------------
Inactive Employees, the "Inactive
--------
55
Employees"). On and after the Closing, the Buyer or one of its
---------
Affiliates shall honor any reemployment rights that any Union Inactive
Employees would otherwise have had with respect to the Seller prior to
the Closing under any collective bargaining agreement or otherwise.
(c) Non-U.S. Employees.
------------------
(i) The Seller shall update Section 2.10(u) of
the Disclosure Schedule as of two (2) days prior to the Closing.
(ii) Effective as of the Closing, Buyer shall
cause the employment of all Non-U.S. Employees to continue in a manner
that is consistent with the laws of the applicable jurisdiction in
which such Non-U.S. Employee is employed.
(iii) The Seller, each Owner and the Buyer shall
each use its reasonable best efforts to undertake that all Laws are
complied with in respect of informing and consulting the Non-U.S.
Employees in respect of the transactions contemplated by this
Agreement.
(d) Benefit Plans.
-------------
(i) The Buyer and the Seller shall take such
actions as are necessary and reasonably requested by the other party to
cause the Buyer to assume sponsorship of the Benefit Plans and any
related contracts, policies, agreements, trust or similar instruments
specifically listed on Section 7.5(d) of the Disclosure Schedule
(respectively, the "Assumed Benefit Plans" and the "Benefit Contracts")
--------------------- -----------------
as of the Closing and to effect the transfer of all assets and benefit
liabilities of the Assumed Benefit Plans and assignment of all Benefit
Contracts, effective as soon as practicable following the Closing;
provided, however, that Buyer shall not be assuming or be responsible
-------- -------
for any obligation or liability with respect to any Benefit Plan that
is not an Assumed Liability. Except as provided in the preceding
sentence, the Buyer and its Affiliates shall not be obligated to
continue or assume any employee benefit plan or program of the Seller
or its Affiliates.
(ii) Effective as of the Closing, with respect
to the Transferred Employees, the Buyer shall, or shall cause its
Affiliates to, recognize all service with the Seller and any of their
respective Affiliates for purposes of eligibility, vesting, vacation
and severance determinations and other seniority-based benefits (but
not benefit accrual under any defined benefit pension plan) under any
employee benefit plan, program or arrangement maintained for the
benefit of the Transferred Employees at and/or after the Closing, to
the same extent such service was recognized under a comparable Benefit
Plan. With respect to any employee benefit plan that is a "welfare
benefit plan" (within the meaning of Section 3(1) of ERISA) maintained
for the benefit of Transferred Employees at and after the Closing, the
Buyer shall use its commercially reasonable efforts to (A) cause there
to be waived any pre-existing condition limitations and (B) give
effect, in determining any deductible and maximum out-of-pocket
limitations for the year in which the Closing occurs, to claims
incurred and amounts paid by, and amounts reimbursed to,
56
the Transferred Employees for such year under comparable Benefit Plans
or Foreign Plans (if applicable) in which such employees participated
immediately prior to the Closing.
(iii) The obligation to provide continuation coverage
benefits under Section 4980B of the Code with respect to any
termination of employment that occurs before, on or after the Closing
to Employees or Former Employees (including any Employee who does not
become a Transferred Employee) and their beneficiaries shall be assumed
by the Buyer as of the Closing. However, the Buyer shall only be
responsible for notices required to be provided in respect of any
"qualifying event" (as such term is defined in Section 4980B of the
Code) occurring as a result of, on or after the Closing.
(e) The Buyer agrees that with respect to any earned but
unused vacation time to which any Transferred Employee is entitled pursuant
to the Astaris Vacation Program immediately prior to the Closing and which
is an Assumed Liability, the Buyer shall cause such Transferred Employee to
be eligible for such vacation as if the Closing had not occurred (except to
the extent required by applicable Law to be paid in cash to any such
Transferred Employee).
(f) The provisions of this Section 7.5 are for the sole
benefit of the parties to this Agreement and their respective permitted
successors and assigns, and nothing herein, expressed or implied, is
intended or shall be construed to confer upon or give to any Person, other
than the parties hereto and their respective permitted successors and
assigns, any legal or equitable or other rights or remedies (with respect to
the matters provided for in this Section 7.5) under or by reason of any
provision of this Agreement. Nothing contained in this Agreement shall (i)
create any obligation on the part of the Buyer to continue the employment of
any Transferred Employee for any period of time following the Closing or
(ii) preclude the Buyer from altering, amending or terminating any of its
employee benefit plans.
(g) Each Owner and the Seller agrees and consents that,
notwithstanding Section 7.8, on and after the date hereof, the Buyer may
have direct discussions and negotiations with, and may make an offer to,
▇▇▇▇ ▇. ▇▇▇▇▇ regarding employment with the Buyer or any of its Affiliates
commencing on or after the Closing Date.
7.6 Labor Matters.
-------------
(a) Following the Closing until ninety (90) thereafter,
neither ICL nor the Buyer shall cause any "employment losses" (as that term
is defined in the WARN Act) that would give rise to any obligations or
Liabilities of the Seller under the WARN Act. On or before the Closing Date,
the Seller shall provide the Buyer with a schedule of all layoffs and any
other "employment losses" (as that term is defined in the WARN Act) in the
United States, by site of employment, implemented by the Seller or the
Subsidiaries during the 90-day period preceding the Closing.
(b) The Buyer, the Seller and each Owner shall cooperate in
connection with any required notification to, or any required consultation
with, the employees, employee representatives, work councils, unions, labor
boards and relevant government agencies concerning the transactions
contemplated by this Agreement with respect to the Non-U.S. Employees of the
Seller or any of the Subsidiaries.
57
7.7 Covenant to Satisfy Conditions.
------------------------------
From the date of this Agreement to the Closing Date (and subject
to the other terms of this Agreement, including Section 7.3), each party
hereto agrees to use its commercially reasonable efforts to cause the
conditions set forth in Article V and Article VI hereof to be satisfied (but
not waived) and the transactions contemplated hereby to be consummated as
promptly as practicable insofar as such matters are within the control of
such party, and to advise each other party promptly if such party determines
that any condition precedent to its obligations hereunder will not be
satisfied in a timely manner.
7.8 Contact With Customers and Suppliers.
------------------------------------
Subject to Section 7.5(g), during the period from the date
hereof and ending on the Closing Date, ICL and the Buyer shall not, and
shall cause their representatives not to, contact any employees, customers,
suppliers and licensors of the Owners, the Seller or any of the Subsidiaries
or Fosbrasil in connection with or pertaining to any subject matter of this
Agreement except with the prior written consent of each of the Owners.
7.9 Noncompetition; No Hire.
-----------------------
(a) General. Each Owner and the Seller covenants and agrees
-------
that from and after the Closing Date and until the fifth (5th) anniversary
of the Closing, each Owner and the Seller shall not, and shall cause its
Covered Affiliates not to, directly or indirectly, as an owner,
equityholder, manager, operator, consultant, member, partner, licensor,
contractor, agent or in any other capacity, engage, or provide any financing
or lease or license any assets to any Person that engages or, to the
knowledge of such Owner, the Seller or Covered Affiliate, intends to engage,
in:
(i) any business or other enterprise in Brazil,
Canada, Mexico or the United States (the "Territory") that develops,
---------
manufactures, produces, distributes, licenses, mines, markets or sells
any products or materials, or engages in any other commercial activity,
falling within the Field of Agreement provided, however, that the
foregoing shall not restrict either Owner or its Covered Affiliates
from distributing, marketing or selling any technical grade sodium
tripolyphosphate (STPP) in Brazil; or
(ii) any business or other enterprise in Europe
(including all of the Russian Republic and Turkey) or Asia that
manufactures, produces, distributes, licenses, markets or sells any
food grade phosphate salts or phosphoric acid of a purity higher than
food grade (according to industry standards prevailing on the date
hereof);
provided, however, that none of the Owners, the Seller or their respective
-------- -------
Covered Affiliates is hereby prevented from investing in or acquiring any
equity or debt securities in a Person if (x) the investment is for passive
investment purposes only (e.g., pension fund investment) without any
----
participation in the management of such Person and the securities owned by
such Owner or Seller (together with its Affiliates) do not comprise more
than two percent (2%) of the total issued and outstanding debt or equity
securities of such Person or (y) if the condition in the preceding subclause
(x) is not fulfilled, such Owner or Seller making such investment completely
divests itself, or enters into a definitive written agreement for the sale,
of the debt or equity securities as
58
promptly as practicable and in any event prior to the six (6) month
anniversary of the closing of such investment.
(b) No Hire. Each Owner and the Seller agrees that from and
-------
after the Closing Date and until the third (3rd) anniversary of the Closing,
it will not, and will cause its subsidiaries and Covered Affiliates not to,
without the prior written consent of the Buyer (which may be withheld in the
Buyer's sole discretion), (i) cause or seek to cause any employees of the
Buyer or its subsidiaries to leave the employ of the Buyer or its
subsidiaries or (ii) hire any person who was an employee of the Business at
or within the six (6) months preceding the Closing or who was an employee of
the Buyer or any of its subsidiaries at any point in the six (6) months
following the Closing; provided, however, that the foregoing provision will
-------- -------
not prevent the Seller, any Owner or their respective Covered Affiliates
from (i) soliciting or hiring through a general solicitation or
advertisement or (ii) soliciting or hiring (A) any secretarial, clerical or
other non-managerial employee (other than professionals, engineers,
technicians, supervisors or sales employees) or (B) any employee of the
Buyer or its subsidiaries whose employment has been terminated by the Buyer
or any of its subsidiaries.
(c) PPA Technology. Each Owner and the Seller covenants and
--------------
agrees that from and after the Closing Date and until the seventh (7th)
anniversary of the Closing, it shall not, and shall cause its Covered
Affiliates not to, directly or indirectly, as an owner, equityholder,
manager, operator, consultant, member, partner, licensor, contractor, agent
or in any other capacity sell, transfer, license or convey the PPA
Technology, its or its Covered Affiliate's ownership interest in the PPA
Technology, or any Covered Affiliate that has an interest in the PPA
Technology, to any Person or entity other than the Buyer without the Buyer's
prior written consent (which may be withheld in Buyer's sole discretion);
provided that it may sell, transfer or convey any Covered Affiliate that has
--------
an interest in the PPA Technology if the purchaser and such Covered
Affiliate each covenants and agrees with the Buyer that such Covered
Affiliate shall be subject to the restrictions set forth in this Section
7.9(c) and shall not sell, transfer, license or convey the PPA Technology or
any interest in the PPA Technology to the purchaser, any subsidiary of the
purchaser or any other Person and such purchaser shall not sell, transfer or
convey any interest in such Covered Affiliate unless the conditions of this
proviso are met with respect to such subsequent purchaser. Each Owner and
the Seller covenants and agrees that it shall, and shall cause its Covered
Affiliates to, keep in full force and effect and enforce, all PPA
Restrictions in accordance with their terms.
(d) Remedies. The restrictive covenants contained in Section
--------
7.2(d) and this Section 7.9 are each covenants independent of any other
provision of this Agreement, and the existence of any claim which any party
may allege against any other party to this Agreement, whether based on this
Agreement or otherwise, shall not prevent the enforcement of these
covenants. Each Owner and the Seller acknowledges that the Buyer is
purchasing the Acquired Assets in reliance on the goodwill of the Business
and the covenants contained in Section 7.2(d) and this Section 7.9 are
essential to the protection of the Buyer's purchase and that the Buyer would
not purchase the Acquired Assets but for these covenants. Each of the
parties hereto, on behalf of itself and its subsidiaries, (i) acknowledges
and agrees that the monetary damages for any material breach of Section
7.2(d) or this Section 7.9 would be inadequate, (ii) agrees and consents
that without intending to limit any additional remedies that may be
available, temporary and permanent injunctive and other equitable relief may
be granted without proof of the
59
inadequacy of legal remedy in any Proceeding that may be brought to enforce
any of the provisions of Section 7.2(d) or this Section 7.9, (iii) hereby
waives any and all defenses it may have on the ground of damages as an
adequate remedy at law and (iv) agrees that the prevailing party in any
enforcement action or court proceeding under Section 7.2(d) or this Section
7.9 shall be entitled to the extent permitted by Law to reimbursement from
the other party for all of the prevailing party's reasonable costs, expenses
and attorneys' fees.
(e) Tolling; Blue Penciling. The length of time for which the
-----------------------
covenants contained in this Section 7.9 shall be in force shall not include
any period of violation or any other period required for litigation during
which the Buyer seeks to enforce this Section 7.9. In the event that the
covenants contained in this Section 7.9 shall be determined by any court of
competent jurisdiction to be unenforceable by reason of its extending for
too long a period of time or over too large a geographical area or by reason
of its being too extensive in any other respect, it shall be interpreted to
extend only over the longest period of time for which it may be enforceable,
and/or over the largest geographical area as to which it may be enforceable
and/or to the maximum extent in all other respects as to which it may be
enforceable, all as determined by such court in such action.
7.10 Bankruptcy Filings, Covenants and Agreements.
--------------------------------------------
(a) Solutia shall file with the Bankruptcy Court a motion
(the "Approval Motion") seeking entry of the Approval Order, which motion
---------------
shall be (x) reasonably sufficient for obtaining such approval and (y) filed
as soon as practicable following the date hereof (the date on which the
Approval Motion is filed, the "Filing Date"), but in any event filed no
-----------
later than is necessary to comply with the written notice requirements of
the Bankruptcy Code and Rules, applicable local rules in the Bankruptcy
Court for the Southern District of New York and any order of the Bankruptcy
Court, so that such motion may be heard at the next regularly scheduled
hearing in Solutia's Bankruptcy case at which such motion could be heard if
it were filed on the fifth (5th) Business Day following the date hereof. As
soon as practicable, but in any event at least two (2) Business Days prior
to the filing of the Approval Motion in accordance with the terms of this
Section 7.10(a), Solutia shall provide the Buyer and its counsel a draft of
such motion for their review and comment. Solutia agrees that it shall use
commercially reasonable efforts to have the Bankruptcy Court enter the
Approval Order as soon as practicable following the date of the filing of
the Approval Motion (it being acknowledged and agreed that Solutia shall
have no obligation to seek an expedited or special hearing date for such
motion) and in any event within sixty-seven (67) calendar days following the
date hereof; provided that, if upon the expiration of such 67-day period the
--------
Approval Order shall not have been entered by the Bankruptcy Court and
Solutia shall diligently be pursuing entry of the Approval Order (as
evidenced by the fact of a pending motion or then scheduled court hearing
with respect to the Approval Motion), and the Seller and the Owners are
otherwise in compliance in all material respects with the terms of this
Agreement including Section 7.13 (without giving effect to any proviso
therein with respect to any actions by the Bankruptcy Court), the Buyer will
negotiate with Solutia a mutually acceptable extension of such period,
which, in any event, shall not exceed thirty (30) additional calendar days;
provided that any extension beyond the sixty-seven (67) calendar day period
--------
shall not limit or otherwise affect any right that the Buyer may have to
terminate this Agreement pursuant to Section 8.1. Each of the parties hereto
agrees that it shall promptly take actions, and the Seller shall and shall
cause the Subsidiaries to take actions
60
promptly, as are reasonably requested by Solutia to assist in obtaining the
entry of the Approval Order, including furnishing affidavits or other
documents or information for filing with the Bankruptcy Court. The Buyer and
ICL shall have the right to provide testimony in support of obtaining the
Approval Order, including appearing in court hearings and furnishing
affidavits.
(b) Solutia shall provide timely written notice of this
Agreement, the proposed sale of the Acquired Assets (free and clear of all
Encumbrances, including claims, liens, and interests of Solutia or of any
creditors or equityholders of Solutia), and the Approval Motion to (i) the
Office of the United States Trustee for the Southern District of New York;
(ii) counsel for the official committee of equity security holders, the
official committee of retirees and the official committee of unsecured
creditors appointed in the Chapter 11 case of Solutia; (iii) counsel for any
other official committee appointed in the Chapter 11 case of Solutia; (iv)
counsel for the agent acting on behalf of Solutia's postpetition lenders;
(v) counsel for the agents or other representatives acting on behalf of
Solutia's primary pre-petition secured creditors, including its pre-petition
senior secured noteholders; (vi) all creditors or equity holders of Solutia
either listed in the schedules of assets and liabilities filed in Solutia's
and its affiliated debtors' Chapter 11 cases or who have filed proofs of
claim or proofs of interest in such Chapter 11 cases as of the date hereof,
which creditors and equity holders Solutia hereby represents and warrants
are all of the creditors and equity holders of Solutia that are actually
known to Solutia as of the date hereof; (vii) all Persons actually known to
Solutia to have asserted any liens, claims, or encumbrances in or upon the
interests of Solutia in Astaris, if any; (viii) the United States Attorney's
office; (ix) the Securities and Exchange Commission; (x) the Internal
Revenue Service and any other taxing authority actually known to Solutia as
having a potential lien, claim, encumbrance, or other interest in or upon
the interests of Solutia in the Seller, if any; and (xi) other parties that
have filed a notice of appearance and demand for service of papers in
Solutia's and its affiliated debtors' Chapter 11 cases under Bankruptcy Rule
2002, and otherwise in accordance with the requirements of the Bankruptcy
Code and Rules, applicable local rules in the Bankruptcy Courts for the
Southern District of New York and order of the Bankruptcy Court.
(c) Nothing contained in any Chapter 11 plan of Solutia or
any of its subsidiaries shall conflict with, or derogate from, the terms of
this Agreement, any of the documents to be delivered by Solutia pursuant to
or in connection with this Agreement, the Initial Relief Order, or the
Approval Order. All of Solutia's obligations under (i) this Agreement with
respect to the matters covered by the Initial Relief Order and (ii) upon the
entry and effectiveness of the Approval Order, (x) this Agreement with
respect to all of Solutia's other obligations under this Agreement
(including its indemnification obligations set forth in Article IX,
including the grant of the administrative expense claim thereunder), (y) any
of the documents to be delivered by Solutia pursuant to or in connection
with this Agreement and (z) the Approval Order shall be (A) binding upon any
successor-in-interest to Solutia (be it under a confirmed Chapter 11 plan or
a purchase agreement, any trustee appointed under either Chapter 7 or
Chapter 11 of the Bankruptcy Code, or otherwise) and (B) deemed and treated
as post-petition contracts that are not capable of or subject to rejection
or other repudiation by Solutia or any of its successors-in-interest
pursuant to Section 365 of the Bankruptcy Code or otherwise. Any amounts due
to the Buyer from Solutia in connection with this Agreement or any document
delivered in connection with this Agreement (i) shall during the pendency of
Solutia's Chapter 11 bankruptcy proceeding, to the extent due and payable,
be treated as allowed administrative expense claims against Solutia, paid in
accordance with the terms of this Agreement or such document, and (ii) shall
not be
61
subject to discharge pursuant to section 1141 of the Bankruptcy Code or
otherwise, and shall be binding in all respects upon, any
successor-in-interest to Solutia (be it under a confirmed Chapter 11 plan or
a purchase agreement, any trustee appointed under either Chapter 7 or
Chapter 11 of the Bankruptcy Code, or otherwise). Notwithstanding anything
herein to the contrary, the obligation to pay the Expense Reimbursement and
Termination Fee pursuant to the terms and conditions of Section 8.2(b) shall
not be subject to the entry and effectiveness of the Approval Order.
7.11 Carteret ISRA Approval.
----------------------
The Seller shall, prior to the Closing, take all actions necessary
to comply with the New Jersey Industrial Site Recovery Act ("ISRA") to the
----
extent required to permit the consummation of the transactions contemplated
by this Agreement, and shall, in connection therewith, obtain and provide to
the Buyer prior to Closing a Remediation in Progress Waiver from the New
Jersey Department of Environmental Protection (an "ISRA Approval") or, if
-------------
such ISRA Approval cannot be obtained prior to Closing, a remediation
agreement issued pursuant to ISRA (with the Seller or FMC serving as
"responsible person" with respect thereto). Buyer acknowledges that FMC is
currently conducting remediation of Astaris' facility at ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ under ISRA. The Buyer agrees that it shall
execute and deliver on the Closing Date the agreement substantially in the
form attached hereto as Exhibit G (the "Carteret Agreement").
--------- ------------------
7.12 Notice and Cure.
---------------
(a) Each party to this Agreement agrees that it shall (i)
promptly notify in writing the other party hereto if such notifying party
becomes aware of any breach of any representation, warranty, covenant or
agreement of such notifying party that will result in the failure to satisfy
any condition to the other party's obligation to close by the scheduled
Closing Date, (ii) concurrently provide the other party with copies of any
and all information or documents in its possession relating to, and will use
commercially reasonable efforts to cure, such breach as promptly as
practicable, but in any event before the Effective Time. No notice given (or
any failure to give notice) pursuant to this Section 7.12(a) shall have any
effect on any right or remedy to which any party may be entitled under this
Agreement.
(b) Each party also may elect at its option to provide
written notice under this Section 7.12(b) if such notifying party becomes
aware of any breach of any representation, warranty, covenant or agreement
of such notifying party that will result in the failure to satisfy any
condition to the other party's obligation to close by the scheduled Closing
Date. The notifying party shall concurrently provide the other party with
copies of any and all information or documents in its possession relating to
such breach. Such notice will be irrevocable when given and shall (i)
specify the section(s) of the Agreement that have been breached, and (ii)
contain an acknowledgement by the notifying party that (x) it has breached
the specified provisions of the Agreement, (y) such breach constitutes a
"Seller Breach" or "Buyer Breach", as the case may be, under Section 8.1
hereof, and (z) as a result of such breach the other party's obligation to
close under the Agreement would be excused. The notifying party shall have
no right to cure any breach for which notice has been given under this
Section 7.12(b). No notice given (or any failure to give notice) pursuant to
this Section 7.12(b) shall have any effect on any right or remedy to
62
which any party may be entitled under this Agreement, including any rights
under Sections 8.1 and 8.2(c) hereof, provided that if (A) such breach
--------
would, in the case of a Seller Breach, have a Material Adverse Effect or, in
the case of a Buyer Breach, have a material adverse effect on the ability of
the Seller or the Owners to consummate the transactions contemplated by this
Agreement without material delay and (B) the recipient party elects to close
notwithstanding that the condition to its obligation to close as a result of
such breach has not been satisfied, then, except in the case of fraud or
intentional and wrongful breach of a representation, warranty, covenant or
agreement, (I) the recipient party shall have no rights or remedies
hereunder by reason of such breach and (II) any such representation or
warranty by the notifying party or parties, or any Disclosure Schedule
applicable thereto, shall be deemed to be amended (effective as of the date
of this Agreement) to the extent necessary to reflect the information
provided in such notice. If any notice is provided under this Section
7.12(b) less than thirty (30) days prior to the Closing Date, the recipient
of such notice shall have the unilateral right to extend the date of Closing
(and the Outside Date under Section 8.1(b) hereof) up to the date which is
thirty (30) days from the date such notice is received by the recipient.
7.13 Negotiations.
------------
From and after the date hereof and until the earlier of the
termination of this Agreement and the Effective Time, neither the Owners,
nor the Seller nor any of their respective subsidiaries shall authorize or
permit any officer, director, employee, investment banker, financial
advisor, attorney, accountant or other agent or representative (each, a
"Representative") retained by or acting for or on behalf of such Owner, the
--------------
Seller or any of their respective Covered Affiliates to, directly or
indirectly, initiate, solicit, knowingly encourage, participate in any
negotiations regarding, furnish any confidential information in connection
with, endorse, enter into, or otherwise cooperate with, assist, participate
in or knowingly facilitate the making of any proposal or offer for, or which
may reasonably be expected to lead to, an Acquisition Transaction, by any
Person or group (a "Potential Acquiror"), whether pursuant to an auction or
------------------
otherwise (any of the foregoing actions, "Negotiation Actions"). The Seller
-------------------
and the Owners shall diligently oppose the entry of any Bankruptcy
Negotiation Order. The Owners and Seller shall promptly inform the Buyer,
orally and in writing, of the material terms and conditions of any proposal
or offer for an Acquisition Transaction that it receives. The Seller, FMC,
Solutia and their respective Covered Affiliates will immediately cease and
cause to be terminated any existing activities, discussions or negotiations
with any parties conducted on or prior to the date of this Agreement
heretofore with respect to any Acquisition Transaction. FMC and Solutia
further agree to take no action under the Joint Venture Agreement, whether
by vote of membership interests, transfer of assets or Equity Interests, or
otherwise, in order to facilitate or effect any Acquisition Transaction by a
Potential Acquiror. As used in this Agreement, "Acquisition Transaction"
-----------------------
means any merger, consolidation or other business combination with respect
to Astaris, or any acquisition in any manner of all or a substantial portion
of the equity of, or all or a substantial portion of the assets of, Astaris,
whether for cash, securities or any other consideration or combination
thereof, other than pursuant to the transactions contemplated by this
Agreement.
63
7.14 Monthly and Interim Financial Statements.
----------------------------------------
From and after the date hereof until the Closing or termination of
the Agreement under Article VIII hereof, the Seller will deliver to the
Buyer, (a) statements of operations for the Business and for the Acquired
Assets and Assumed Liabilities for each month, for that part of the fiscal
year ending with such month and, if such month is the end of a calendar
quarter, the calendar quarter ending with such month, and (b) the related
balance sheets as at the end of such month, as soon as available and in any
event within ten (10) calendar days after the end of each calendar month in
the case of the financial statements as of and for the monthly and
year-to-date periods, and within twenty-five (25) calendar days after the
end of such month in the case of the financial statements as of and for the
quarterly periods, in each case certified by the chief financial officer of
the Seller to have been prepared consistent with the Audited Financial
Statements, and the Historical Interim Financial Statements (as applicable),
except as otherwise noted therein, and give effect to assumptions used in
the preparation thereof, which in the view of management of the Seller are
on a reasonable basis and in good faith and fairly present in all material
respects the financial position and results of operations for the Acquired
Assets and Assumed Liabilities after giving effect to the transaction and
adjustments referred to in the statements as of and for the periods
presented therein; provided that the statements will include all properties,
--------
rights and assets relating to the facility located in Sauget, Illinois based
on the contracts and cost structure in force during the period of the
statements and will not reflect the Sauget Supply Agreement.
7.15 Use of Names and Logos.
----------------------
(a) The Seller and each Owner acknowledges and agrees that the
consummation of the transactions contemplated under this Agreement shall
vest in the Buyer all right, title and interest of the Seller, the
Subsidiaries and the Owners in and to, and all of the goodwill associated
with, the trademarks, service marks, trade names, logos, brand names,
corporate names, business names, slogans, trade dress, Internet domain names
and other trade indicia of the Business that consist of or include the name
ASTARIS or any name or trademark listed in Section 2.12(a) of the Disclosure
Schedule (collectively, the "ASTARIS Marks"). Such rights shall include all
-------------
rights in and to all income, royalties, damages and payments now or
hereafter due or payable with respect to, and in and to all rights of action
arising from the ASTARIS Marks, all claims for damages by reason of past,
present and future infringement of the ASTARIS Marks and the right to ▇▇▇
and collect damages for such infringement, to be held and enjoyed by the
Buyer for its own use and benefit and for its successors and assigns.
(b) After the Closing, the Buyer shall have the right to:
(i) sell the finished goods Inventory purchased
from the Seller;
(ii) use in the operation of the Business all
labels and packaging materials purchased by the Buyer; and
(iii) use all such other logos, trademarks and
trade identification of the Seller as are located at or on the Acquired
Assets until such time as the Buyer may conveniently change them.
64
(c) Within thirty (30) calendar days following the Closing Date,
the Seller and the Owners shall, and shall cause their respective
subsidiaries to, amend or terminate any organizational document, business
registration, certificate of assumed name or d/b/a filings or the like so as
to eliminate such Person's right to use, or do business under, the name
"Astaris," or a name that is similar to such name, and the Seller and the
Owners shall not, and shall cause their respective subsidiaries not to,
thereafter use that name or other names acquired by the Buyer hereunder or
names confusingly similar thereto.
7.16 Resignation of Directors and Officers of Subsidiaries.
-----------------------------------------------------
The Seller and the Owners shall use their commercially reasonable
efforts to cause all directors and officers of the Subsidiaries (except
those designated by the Buyer) to duly execute and deliver to the Buyer
resignations from such positions effective as of the Closing.
7.17 Collection of Receivables.
-------------------------
Upon the Closing, the Seller shall, by letter prepared by the
Buyer and reasonably satisfactory to the Seller (the "Letter"), irrevocably
------
authorize, instruct and direct that the account parties of all accounts,
notes and receivables (including insurance proceeds) constituting Acquired
Assets (such parties, the "Seller Account Parties") make and deliver all
----------------------
payments relating thereto on or after the Closing to such location, bank and
account (the "Lockbox Account") as the Buyer shall specify. If,
---------------
notwithstanding such Letter, any of the Seller Account Parties remit
payments on or after the Closing directly or indirectly to the Seller, the
Subsidiaries or the Owners instead of to the Lockbox Account, each of the
Seller and the Owners agrees that it shall promptly (and in any event no
later than five (5) Business Days following receipt) deliver all such
payments that it receives (including but not limited to negotiable
instruments which shall be duly endorsed by the Seller or such Owner to the
order of the Buyer) to the Buyer. Effective upon the Closing, the Seller and
each Owner hereby irrevocably designates, makes, constitutes and appoints
the Buyer (and all persons designated by the Buyer) as its true and lawful
attorney-in-fact to do any of the following in the sole discretion of the
Buyer: to receive, give receipts for, take, endorse, assign, deliver,
deposit, demand, collect, ▇▇▇ on, compound, and give acquittance for any and
all information, documents, payments forms (including negotiable and
non-negotiable instruments) and proceeds received by the Buyer via the
Lockbox Account or from the Seller that relate to the accounts, notes and
receivables (including insurance proceeds) of the Seller Account Parties
constituting Acquired Assets. The Seller and each Owner shall use its
commercially reasonable efforts, at the Buyer's request, to assist the Buyer
in collecting in full from Seller Account Parties all amounts owed pursuant
to all accounts, notes and receivables constituting Acquired Assets.
7.18 OPEB.
----
The Seller shall, and each Owner shall cause the Seller to,
satisfy the OPEB Obligations as they become due.
7.19 Cooperation.
-----------
ICL, the Buyer, the Seller and the Owners shall cooperate with
each other and shall use their commercially reasonable efforts to cause
their respective Covered Affiliates,
65
officers, employees, agents and representatives to cooperate with each other
to provide an orderly transition of the Business from the Seller to the
Buyer and to minimize the disruption to the Business resulting from the
transactions contemplated hereby.
7.20 Real Property Matters.
---------------------
(a) The Seller shall cooperate with the Buyer, at the Buyers'
sole cost and expense, in the Buyer's efforts to obtain, no later than
fifteen (15) calendar days prior to Closing, as-built surveys of each parcel
of Owned Real Property (collectively, the "Surveys") in accordance with (i)
-------
the most current minimum standard detail requirements for ALTA/ACSM Land
Title Surveys, including Table A items 2, 3, 4, 6, 7, 8, 9, 10, 11 and 13
and such additional or different Table A Items as the Buyer may, in its
reasonable discretion, require, (ii) with the Accuracy Standards (as adopted
by ALTA and ACSM) of an Urban Survey, and (iii) local standards required by
the Buyer, in its reasonable discretion, dated after the date hereof, and
showing, without limiting the foregoing, with respect to each parcel of the
Owned Real Property, all easements and other appurtenances benefiting and
all easements and other encumbrances burdening such parcel. Each Survey
shall be certified to any lender providing financing to the Buyer for the
transactions contemplated hereby, the Buyer, the title company providing the
Title Insurance (the "Title Company") and any other person reasonably
-------------
requested by the Buyer and shall comply with any requirements imposed by the
Title Company as a condition to the removal of any survey exception from the
general exceptions to the Title Insurance covering the Owned Real Property
shown on such survey.
(b) The Seller shall cooperate with the Buyer at the Buyers' sole
cost and expense at regular rates, in the Buyer's efforts to obtain, no
later than fifteen (15) calendar days prior to Closing, title commitments
for all of the Owned Real Property, with legible copies of all listed
exceptions, and as of the opening of business for the Closing Date, good and
valid title insurance policies or, in final form, irrevocable ALTA title
insurance binders or commitments, from a Title Company reasonably acceptable
to the Buyer (the "Title Insurance"), dated as of the Closing Date, insuring
---------------
the Buyer as the fee owner of the Seller's parcels of Owned Real Property as
of Closing, subject only to Permitted Encumbrances, and in connection with
the issuance of the policies of Title Insurance, execute and deliver, or
cause to be executed and delivered, to the Title Company any affidavits
reasonably requested by the Title Company or the Buyer in connection with
the issuance of the policies as required hereunder; provided that the Seller
--------
shall not be required to undertake or incur any liability under any such
affidavit in excess of any liability that it would otherwise have under this
Agreement.
7.21 Bulk Transfer Laws.
------------------
The Buyer and ICL hereby waive compliance with the provisions of
any so-called "bulk transfer law" of any jurisdiction in connection with any
transactions contemplated by this Agreement. The Seller agrees to indemnify
and hold harmless the Buyer and ICL from and against any and all
liabilities, claims or Encumbrances that may be asserted by third parties
against the Buyer and ICL as a result of such non-compliance.
66
7.22 Astaris Brasil.
--------------
At the Closing, Solutia shall transfer its Equity Interests in
Astaris Brasil to one of the Subsidiaries or an Affiliate of the Buyer as
designated prior to the Closing by the Buyer.
7.23 Intellectual Property Matters.
-----------------------------
(a) Title to Certain Intellectual Property. From and after the
--------------------------------------
date of this Agreement, the Seller and each Owner shall, as applicable, as
promptly as practicable, (i) execute, or use commercially reasonable efforts
to cause to be executed, and/or (ii) file, and use commercially reasonable
efforts to record, with the appropriate intellectual property offices or
Governmental Authorities, all instruments reasonably necessary to record
that the Seller is named as the owner of record of all of the Seller's
ownership rights in and to any material Intellectual Property included in
the Acquired Assets for which Seller is the owner but is not named as the
owner of record, in the case of clauses (i) and (ii) solely at the expense
of the Seller.
(b) Jointly-Owned Intellectual Property. From and after the date
-----------------------------------
of this Agreement, for all material patents and patent applications included
in the Acquired Assets in which Seller has a partial or joint-ownership
interest (the "Co-Owned Patents"), (i) each Owner shall transfer or caused
----------------
to be transferred to the Seller, prior to the Closing, such Owner's or any
of its Covered Affiliates' ownership interest in such Co-Owned Patents, if
any, (ii) the Seller and each Owner shall use its commercially reasonable
efforts to obtain the Consent of any and all co-owners whose Consents are
necessary to transfer and assign Seller's right, title and interest in the
Co-Owned Patents to the Buyer, if any, and (iii) use its commercially
reasonable efforts to obtain from all co-owners of the Co-Owned Patents an
agreement not to exercise any preemptive right or right-of-first refusal
that such co-owner may have to acquire or have acquired the right, title and
interest in the Co-Owned Patents not owned by such co-owner if and to the
extent that any such rights exist, in the case of clauses (i), (ii) and
(iii) solely at the expense of the Seller.
7.24 Monsanto Supply Agreement Matters.
---------------------------------
(a) Within sixty (60) calendar days after the end of each year,
the Buyer shall deliver to the Seller a statement (the "Monsanto Costs
--------------
Statement") setting forth in good faith and in reasonable detail the amount
---------
and basis of any Additional Monsanto Supply Agreement Environmental Costs
that were charged to the Buyer under the Monsanto Supply Agreement for the
previous year. The Buyer shall use commercially reasonable efforts
(including making requests for information that it has the right to request
under the Monsanto Supply Agreement) to obtain from Monsanto, maintain and
furnish to the Seller, in connection with the delivery of the Monsanto Costs
Statement, information and documents sufficient to permit the independent
calculation and verification of the amount and basis of such Additional
Monsanto Supply Agreement Environmental Costs (such information and
documents, the "Monsanto Verification Information"). The Monsanto Costs
---------------------------------
Statement shall be prepared by the Buyer based on the Monsanto Verification
Information for and relevant to such fiscal year. If, despite the exercise
by the Buyer of such commercially reasonable efforts, the Buyer is not able,
within such sixty (60) day period to calculate and verify the amount and
basis of the Additional Monsanto Supply Agreement Environmental Costs for
the preceding fiscal year, the Buyer shall so indicate in the Monsanto Costs
Statement and shall include in the Monsanto Costs Statement its reasonable,
67
good faith estimate of the amount of such Additional Monsanto Supply
Agreement Environmental Costs. The Seller shall have sixty (60) calendar
days from the date of receipt to review the Monsanto Costs Statement, during
which time the Seller and the Owners shall provide to the Buyer any
information or documents regarding the Additional Monsanto Supply Agreement
Environmental Costs available to such party in the exercise of its
commercially reasonable efforts and Buyer shall (x) continue to exercise its
commercially reasonable efforts as set forth in the third preceding sentence
and (y) otherwise cooperate with and provide to the Seller and its
representatives and accountants reasonable access to any additional
information and documents of Monsanto and the Buyer regarding the Additional
Monsanto Supply Agreement Environmental Costs reasonably requested by the
Seller in connection with its review of the Monsanto Costs Statement (such
additional information and documents, together with the Monsanto
Verification Information, the "Verification Information"). Unless the Seller
------------------------
delivers written notice to the Buyer setting forth with reasonable
specificity the items disputed by the Seller and the basis therefor on or
prior to the sixtieth (60th) calendar day after receipt of the Monsanto
Costs Statement, the Seller shall be deemed to have accepted and agreed to
the Monsanto Costs Statement and such statement (and the calculations
contained therein) shall be final, binding and conclusive. If the Seller
notifies the Buyer of its objections to any items contained in the Monsanto
Costs Statement (or specific calculations contained therein) with reasonable
specificity and the basis therefor within such sixty (60) day period, the
Seller and the Buyer shall, within thirty (30) calendar days following
delivery of such notice by the Seller to the Buyer (the "Monsanto Resolution
-------------------
Period"), attempt in good faith to resolve their differences with respect to
------
the disputed items (or calculations) specified in the notice (the "Monsanto
--------
Disputed Items"), and all other (i.e., the undisputed) items (and all
--------------
calculations relating thereto) will be final, binding and conclusive. Any
resolution or deemed resolution by the Seller and the Buyer during the
Monsanto Resolution Period as to any Monsanto Disputed Items shall be final,
binding and conclusive on the parties hereto and shall, in the case of an
agreed upon (as opposed to a deemed) resolution be set forth in writing.
(b) If the Buyer and the Seller do not resolve all Monsanto
Disputed Items by the end of the Monsanto Resolution Period, then all
Monsanto Disputed Items remaining in dispute will be submitted within thirty
(30) calendar days after the expiration of the Monsanto Resolution Period to
the Neutral Arbitrator. The Neutral Arbitrator shall act as an arbitrator to
determine only those Monsanto Disputed Items remaining in dispute,
consistent with this Section, and shall request a statement from the Buyer
and the Seller regarding such Monsanto Disputed Items. In resolving such
Monsanto Disputed Items, the Neutral Arbitrator may not assign a value to
any Monsanto Disputed Item greater than the greatest value for such Monsanto
Disputed Item claimed by any party or less than the lowest value for such
Monsanto Disputed Item claimed by any party. All fees and expenses relating
to the work, if any, to be performed by the Neutral Arbitrator will be
allocated between the Buyer and the Seller in the same proportion that the
aggregate amount of the Monsanto Disputed Items so submitted to the Neutral
Arbitrator that is unsuccessfully disputed by each such party (as finally
determined by the Neutral Arbitrator) bears to the total amount of such
Monsanto Disputed Items so submitted. In addition, the Buyer and the Seller
shall provide to the Neutral Arbitrator originals or copies of any and all
Verification Information regarding the Additional Monsanto Supply Agreement
Environmental Costs, together with any and all other information and
documents in the possession and control of such party reasonably necessary
to enable the Neutral Arbitrator to perform its function as arbitrator. If
either the Buyer or the Seller fails to submit a statement regarding any
Monsanto Disputed Item
68
submitted to the Neutral Arbitrator or otherwise fails to provide to the
Neutral Arbitrator any Verification Information or such other information or
documents referred to in the preceding sentence, in each case within the
time determined by the Neutral Arbitrator, then the Neutral Arbitrator shall
render a decision based solely on the statement, Verification Information
and other information and documents timely submitted. The Neutral Arbitrator
will deliver to the Buyer and the Seller a written determination (such
determination to include a work sheet setting forth all material
calculations used in arriving at such determination and to be based solely
on information timely provided to the Neutral Arbitrator by the Seller and
the Buyer) of the Monsanto Disputed Items submitted to the Neutral
Arbitrator within thirty (30) calendar days of receipt of such Monsanto
Disputed Items, which determination will be final, binding and conclusive
and judgment may be entered on the award. The final, binding and conclusive
Monsanto Costs Statement for any year, based either upon agreement or deemed
agreement by the Buyer and the Seller or the written determination delivered
by the Neutral Arbitrator in accordance with this Section, will be the
"Conclusive Monsanto Costs Statement."
-----------------------------------
(c) The amount set forth in the Conclusive Monsanto Costs
Statement shall be applied against the Monsanto Basket. To the extent that
any such amount constitutes any amount in excess of the Monsanto Basket, the
Seller shall, and the Owners shall cause the Seller to, pay to the Buyer
such amount within five (5) Business Days of such Monsanto Costs Statement
becoming final, binding and conclusive by wire transfer of immediately
available funds to an account designated by the Buyer. Any amount due under
this Section that is not paid when due shall accrue interest from the date
payment was required to be made until the date of such payment at the prime
rate of Citibank, N.A. in effect on the date such payment was required to be
made plus three percent (3%) per annum.
ARTICLE VIII
TERMINATION
8.1 Termination.
-----------
This Agreement shall automatically terminate if the Bankruptcy
Court enters a Bankruptcy Negotiation Order. This Agreement may be
terminated and the transactions contemplated hereby may be abandoned at any
time prior to the Closing:
(a) with the mutual written consent of the Seller, each Owner
and the Buyer;
(b) by the Seller and the Owners, on the one hand, or the Buyer,
on the other hand, upon written notice to the other parties, if the Closing
has not occurred on or before the one hundred twentieth (120th) calendar day
after the earlier of (x) the date on which the Approval Motion is filed with
the Bankruptcy Court and (y) the fifth (5th) Business Day following the date
hereof (the "Outside Date"), unless the failure of such occurrence is due to
------------
the failure of the parties wishing to terminate to comply in all material
respects with their representations, warranties, agreements and covenants
contained herein; provided, however, that if the Antitrust Division or the
-------- -------
FTC makes a second request for information pursuant to Section 7(A)(e) of
the HSR Act, then such date shall automatically be extended until the two
hundred seventieth (270th)
69
calendar day after the earlier of (x) the date on which the Approval Motion
is filed with the Bankruptcy Court and (y) the fifth (5th) Business Day
following the date hereof (which shall then become the Outside Date);
(c) by either the Seller and the Owners, on the one hand, or the
Buyer, on the other hand, upon written notice to the other parties, if any
court or Governmental Authority of competent jurisdiction shall have issued
an order, decree or ruling or taken any other action restraining, enjoining
or otherwise prohibiting the consummation of the Closing hereunder and such
order, decree or ruling or other action shall have become final and
nonappealable;
(d) by the Buyer if the Approval Order has not been entered
within sixty-seven (67) calendar days following the date hereof or has not
become a Final Order within ten (10) calendar days thereafter;
(e) by the Seller or the Owners at any time if (i) the
representations and warranties of the Buyer or ICL in this Agreement that
are qualified as to materiality were not true and correct or the
representations and warranties of the Buyer or ICL in this Agreement that
are not so qualified were not true and correct in all material respects when
made or at any time thereafter, and such failure to be true and correct has,
or would reasonably be expected to have, individually or in the aggregate
with all other such failures, a material adverse effect on the ability of
ICL and the Buyer to consummate the transactions contemplated by this
Agreement and the Transaction Documents without material delay or (ii) the
Buyer or ICL is in breach in any material respect of any of its covenants or
agreements in this Agreement (clauses (i) and (ii) collectively, a "Buyer
-----
Breach"), and such Buyer Breach continues uncured for thirty (30) calendar
------
days after written notice thereof by the Seller (provided that such thirty
--------
(30) day period shall be extended (but not past the Outside Date), if such
Buyer Breach is capable of cure, for so long as any condition set forth in
Article V shall not have been satisfied or waived); or
(f) by the Buyer at any time if (i) the representations and
warranties of the Seller or the Owners in this Agreement that are qualified
as to materiality were not true and correct or the representations and
warranties of the Seller or the Owners in this Agreement that are not so
qualified were not true and correct in all material respects when made or at
any time thereafter, and such failure to be true and correct has, or would
reasonably be expected to have, individually or in the aggregate with all
other such failures, a Material Adverse Effect or (ii) the Seller or Owners
are in breach in any material respect of any of their respective covenants
or agreements in this Agreement (clauses (i) and (ii) collectively, a
"Seller Breach"), and such Seller Breach continues uncured, if capable of
-------------
cure, for thirty (30) calendar days after written notice thereof by the
Buyer (provided that such thirty (30) day period shall be extended (but not
--------
past the Outside Date), if such Seller Breach is capable of cure, for so
long as any condition set forth in Article VI shall not have been satisfied
or waived).
8.2 Procedure and Effect of Termination.
-----------------------------------
(a) In the event of the termination of this Agreement by the
Seller and the Owners, on the one hand, or the Buyer and ICL, on the other
hand, pursuant to Section 8.1 hereof, written notice thereof shall forthwith
be given to the other parties.
70
(b) If this Agreement is terminated (i) by the Buyer pursuant to
Section 8.1(d) hereof, (ii) by the Seller and the Owners pursuant to (A)
Section 8.1(b) hereof because any of the conditions precedent to the
obligations of the Seller and Owners to effect the Closing under Sections
5.4 (other than for failure to obtain any approval under any
Competition/Investment Law), 5.5 or 5.6 (other than as a result of (x) any
Competition/Investment Law, (y) any Governmental Order issued under any
Competition/Investment Law or (z) any violation of Law or a Governmental
Order if resulting primarily from the conduct of ICL or any of its Covered
Affiliates) have not been satisfied or waived or (B) Section 8.1(c) hereof
(other than as a result of any Governmental Order issued under any
Competition/Investment Law) or (iii) automatically pursuant to the first
sentence of Section 8.1, then, in the case of each of clauses (i), (ii) and
(iii) of this Section 8.2(b), the Seller shall immediately reimburse the
Buyer in cash for all of the Buyer's Transaction Expenses, not to exceed two
million dollars ($2,000,000) (the "Expense Reimbursement"). If the
---------------------
Bankruptcy Court enters a Bankruptcy Negotiation Order thereby giving rise
to the automatic termination of this Agreement pursuant to the first
sentence of Section 8.1 and within nine (9) months after the date of the
entry of the Bankruptcy Negotiation Order the Seller or the Owners
consummate an Acquisition Transaction with another Person or group with a
purchase price with a value equal to or greater than $265 million, or enter
into an agreement for an Acquisition Transaction with another Person or
group and at any time after such 9-month period consummate an Acquisition
Transaction with such Person or group with a purchase price with a value
equal to or greater than $265 million, the Buyer shall be paid immediately
by the Seller at the closing of such Acquisition Transaction an amount equal
to seven million five hundred thousand dollars ($7,500,000) minus the
aggregate amount of any Expense Reimbursement paid to the Buyer (the
"Termination Fee"), payable in cash from the proceeds of such Acquisition
---------------
Transaction; provided, however, that the Buyer shall not be entitled to a
-------- -------
Termination Fee if the Bankruptcy Court enters a Bankruptcy Negotiation
Order that requires Solutia to conduct an auction for an Acquisition
Transaction and ICL and the Buyer elect not to participate in such auction.
The Owners and the Seller shall cause the agreement governing the
Acquisition Transaction to provide that the Termination Fee shall be paid
out of the proceeds of such Acquisition Transaction to ICL or the Buyer at
the closing of the Acquisition Transaction. The Seller and the Owners
acknowledge that the agreements contained in this Section 8.2(b) are an
integral part of the transactions contemplated by this Agreement, and that
without these agreements, neither the Buyer nor ICL would enter into this
Agreement; accordingly, if the Seller fails to pay any amount of the Expense
Reimbursement or Termination Fee due pursuant to this Section 8.2(b), and,
in order to obtain such payment, the Buyer commences a suit which results in
a final, nonappealable judgment against the Seller for the payment set forth
in this Section 8.2(b), the Seller shall pay the Buyer its reasonable costs
and expenses (including reasonable attorneys' fees) in connection with such
suit, together with interest on the Termination Fee from the date payment
was required to be made until the date of such payment at the prime rate of
Citibank, N.A. in effect on the date such payment was required to be made
plus three percent (3%) per annum. If this Agreement is terminated pursuant
to a provision that calls for a payment to be made under this Section
8.2(b), it shall not be a defense to the obligation of the Seller to pay
hereunder that this Agreement could have been terminated at an earlier or
later time.
(c) If this Agreement is terminated and the transactions
contemplated by this Agreement are abandoned as provided herein:
71
(i) Each party will redeliver all documents, work
papers and other material of any other party relating to the
transactions contemplated hereby, whether so obtained before or after
the execution hereof, to the party furnishing the same;
(ii) The provisions of the Confidentiality
Agreement, Sections 7.2(d), 8.2(b) and 8.2(c) and Article X shall
continue to apply following such termination; and
(iii) No party to this Agreement will have any
liability under this Agreement to any other party, except (A) that
nothing herein shall relieve any party from any liability for any
breach of any of the representations, warranties, covenants and
agreements set forth in this Agreement prior to such termination and
(B) as contemplated by paragraphs (b) and (c) above and by Sections
10.1, 10.2 and 10.15.
ARTICLE IX
INDEMNIFICATION
9.1 Indemnification.
---------------
(a) Indemnification by the Owners.
-----------------------------
(i) Subject to the terms, conditions and limits
set forth in this Section 9.1, from and after the Closing, the Owners,
severally and not jointly, agree to indemnify, defend and hold the
Buyer, ICL and its Affiliates and their respective officers, directors,
partners, equityholders, stockholders, employees, agents and
representatives (the "Buyer Indemnified Persons") harmless from and in
-------------------------
respect of any and all losses, claims, liabilities, obligations,
damages (including consequential damages, but solely to the extent that
such consequential damages are recovered by a third party from an
Indemnified Party), fines, penalties and costs (in each case including
reasonable out-of-pocket expenses (including reasonable fees and
expenses of counsel, experts and accountants and reasonable fees and
expenses to enforce the Escrow Agreement)) (each a "Loss" and
----
collectively, "Losses"), that are asserted against or paid, suffered or
------
incurred by any Buyer Indemnified Persons which, directly or indirectly,
arise out of or result from:
(A) in the case of Solutia:
(I) the breach of any
representation or warranty of Solutia or the Seller set forth
in this Agreement;
(II) any breach of any covenant or
agreement of Solutia or the Seller contained in this Agreement;
(III) any Retained Solutia Liability,
Retained Astaris Liability, Excluded Solutia Asset or Excluded
Astaris Asset; and
72
(IV) the enforcement by a Buyer
Indemnified Person of its indemnification rights under this
Agreement against Solutia; and
(B) in the case of FMC:
(I) the breach of any
representation or warranty of FMC or the Seller set forth
in this Agreement;
(II) any breach of any covenant or
agreement of FMC or the Seller contained in this Agreement;
(III) any Retained FMC Liability,
Retained Astaris Liability, Excluded FMC Asset or Excluded
Astaris Asset; and
(IV) the enforcement by a Buyer
Indemnified Person of its indemnification rights under this
Agreement against FMC.
(ii) Anything to the contrary contained herein
notwithstanding, (A) none of the Buyer Indemnified Persons shall
be entitled to recover from either Owner for any claim for
indemnity in respect of Losses arising under Section
9.1(a)(i)(A)(I) or 9.1(a)(i)(B)(I) unless and until, and then only
to the extent that, the total of all such claims against such
Owner in respect of such Losses exceeds one million five hundred
thousand dollars ($1,500,000) (the "Basket"), and in such event
------
only to the amount of such excess, provided that, in calculating
-------- ----
whether the Basket has been exceeded, only individual claims or
groups of related claims for Losses in excess of two hundred
thousand dollars ($200,000), irrespective of any sharing or
allocation of Losses between the Owners (the "Minimum Claim
-------------
Amount"), shall be considered, provided, further, that after the
------ -------- -------
Basket has been exceeded such Owner shall be liable for any Losses
under Section 9.1(a)(i)(A)(I) or 9.1(a)(i)(B)(I) in excess of the
Basket; and (B) the Buyer Indemnified Persons shall not be
entitled to recover from either Owner more than twenty-five
million dollars ($25,000,000) (the "Cap") for any and all
---
indemnifiable claims for indemnity in respect of Losses arising
under Section 9.1(a)(i)(A)(I) or 9.1(a)(i)(B)(I); provided,
--------
however, that none of the Basket or the Cap shall apply with
-------
respect to any amounts payable pursuant to Section 1.2 or Section
1.4 or Losses arising under Sections 9.1(a)(i)(A)(II), (III) or
(IV) or 9.1(a)(i)(B)(II), (III) or (IV) or Sections 2.1, 2.2 and
2.4 (as it relates to the PCS Contract or the Fosbrasil Supply
Agreement), the first sentence of Section 2.7(a), Sections 2.9,
2.24, 3.1, 3.2 and 3.5, or in respect of fraud or intentional and
wrongful breach of a representation or warranty.
(iii) In addition to any and all other applicable
limitations on the obligations of each Owner under this Article
IX, none of the Buyer Indemnified Persons shall be entitled to
recover from either Owner for any claim
73
for indemnity in respect of Losses otherwise subject to indemnity under
Section 9.1(a)(i)(A)(III) or Section 9.1(a)(i)(B)(III) for Retained
Environmental Liabilities which constitute Unknown Environmental
Liabilities (other than as to Excluded Assets): (A) in excess of
seventy-five percent (75%) of such Losses if written notice providing
material details in reasonable specificity supporting such claim for
indemnity in respect of such Losses has not been provided to the
applicable Owner prior to the fifth (5th) anniversary of the Closing;
(B) in excess of fifty percent (50%) of such Losses if written notice
providing material details in reasonable specificity supporting such
claim for indemnity in respect of such Losses has not been provided to
the applicable Owner prior to the seventh (7th) anniversary of the
Closing; or (C) in excess of twenty-five percent (25%) of such Losses
if written notice providing material details in reasonable specificity
supporting such claim for indemnity in respect of such Losses has not
been provided to the applicable Owner prior to the tenth (10th)
anniversary of the Closing. Neither Owner shall have any obligation
under Section 9.1(a)(i)(A)(III) or Section 9.1(a)(i)(B)(III) for
Retained Environmental Liabilities which constitute Unknown
Environmental Liabilities (other than as to Excluded Assets), to the
extent that otherwise indemnified Losses are incurred by any Buyer
Indemnified Person and written notice providing material details in
reasonable specificity supporting such claim for indemnity in respect
of such Losses has not been provided to the applicable Owner prior to
the fifteenth (15th) anniversary of the Closing. None of the foregoing
shall alter the duration of the survival of the representations and
warranties as provided for under Section 9.1(d).
(b) Indemnification by the Buyer.
----------------------------
(i) Subject to the terms, conditions and limits
set forth in this Section 9.1, from and after the Closing, the Buyer
agrees to indemnify, defend and hold the Seller, the Owners and their
respective Affiliates and their respective officers, directors,
partners, equity holders, stockholders, employees, agents and
representatives (the "Owners Indemnified Persons") harmless from and in
--------------------------
respect of any and all Losses asserted against or paid, suffered or
incurred by any Owners Indemnified Persons which, directly or
indirectly, arise out of or result from:
(A) the breach of any representation or
warranty of the Buyer or ICL set forth in this Agreement;
(B) any breach of any covenant or agreement
of the Buyer or ICL contained in this Agreement;
(C) any Assumed Liability;
(D) the enforcement by an Owners
Indemnified Person of its indemnification rights under this
Agreement against the Buyer or ICL; and
74
(E)(I) any Unknown Environmental Liabilities
that would have been subject to indemnification by the Owners
pursuant to this Article IX but for the provisions of Section
9.1(a)(iii) and (II) Buyer Environmental Liabilities.
(ii) Anything to the contrary contained herein
notwithstanding, (A) none of the Owners Indemnified Persons shall be
entitled to recover from the Buyer for any claim for indemnity in
respect of Losses arising under Section 9.1(b)(i)(A) unless and until,
and then only to the extent that, the total amount of all such claims
in respect of such Losses exceeds three million dollars ($3,000,000)
(the "Buyer Basket"), and in such event only to the amount of such
------------
excess, provided that, in calculating whether the Buyer Basket has been
-------- ----
exceeded, only individual claims or groups of related claims for Losses
in excess of the Minimum Claim Amount shall be considered, provided,
--------
further, that after the Buyer Basket has been exceeded the Buyer shall
-------
be liable for any Losses under Section 9.1(b)(i)(A) in excess of the
Buyer Basket; and (B) the Owners Indemnified Persons shall not be
entitled to recover from the Buyer, nor shall the Buyer be responsible
to pay, more than fifty million dollars ($50,000,000) (the "Buyer Cap")
---------
for any and all indemnifiable claims for indemnity in respect of Losses
arising under Section 9.1(b)(i)(A); provided, however, that none of the
-------- -------
Buyer Basket or the Buyer Cap shall apply with respect to any Losses
arising under Sections 9.1(b)(i)(B), (C), (D) or (E) or Sections 4.1,
4.2 or 4.6 or in respect of fraud or intentional and wrongful breach of
a representation or warranty.
(c) Indemnification Calculations.
----------------------------
(i) The amount of any Losses for which
indemnification is provided under this Article IX shall be computed net
of any third-party insurance proceeds and recoveries in respect of
third party indemnification obligations actually received by the
indemnified party in connection with such Losses net of any increase in
premiums or retroactive premium adjustment attributable to such
recovery of insurance proceeds. If an indemnified party receives such
insurance proceeds or indemnification recoveries in connection with
Losses for which it has received indemnification, such party shall
refund to the indemnifying party the amount of such insurance proceeds
when received, up to the amount of indemnification received net of any
increase in premiums or retroactive premium adjustment attributable to
such recovery of insurance proceeds. If the amount with respect to
which any claim is made under this Article VIII (an "Indemnity Claim")
---------------
gives rise to an actually realized Tax Benefit to the party that made
the claim, such party shall refund to the indemnifying party the amount
of such Tax Benefit when, as and if actually realized; provided,
--------
however, that such obligation of the indemnified party to refund to the
-------
indemnifying party the amount of any Tax Benefit shall only apply to
the extent that such Tax Benefit is actually realized within three (3)
years following the Closing Date. For purposes of this Section 9.1(c),
a "Tax Benefit" to a party means an amount by which the Tax Liability
-----------
of such party (or group of Affiliates including such party) is actually
reduced (including by deduction, reduction of income by virtue of
75
increased tax basis or otherwise, entitlement to refund, credit or
otherwise), but not below zero, net of any increase in such party's Tax
Liability as a result of its receipt of payment for such Indemnity
Claim plus any related interest received from the relevant Governmental
Authority with responsibility for Taxes. Where a party has other
losses, deductions, credits or items available to it, the Tax Benefit
from any losses, deductions, credits or items relating to the Indemnity
Claim shall be deemed to be utilized after all other losses,
deductions, credits or items have been completely utilized (i.e., a Tax
----
Benefit is not actually realized until the relevant party actually pays
less in Taxes than it otherwise would have paid without the supposed
Tax Benefit). In the event that there should be a determination
disallowing the Tax Benefit, the indemnifying party shall be liable to
the indemnified party for any Taxes or Losses resulting from such
disallowance.
(ii) The parties agree that any indemnification
payments made pursuant to this Agreement shall be treated for Tax
purposes as an adjustment to the Purchase Price, unless otherwise
required by applicable law.
(iii) Each indemnified party shall take commercially
reasonable steps to mitigate any Loss in respect of which a claim could
be made under this Article IX or any other provision of this Agreement,
provided such mitigation does not disrupt the ongoing business
operations of the indemnified party. Any costs or reasonable out of
pocket expenses incurred by an Indemnified Party in connection with
such mitigation shall constitute a "Loss" that may be recovered by the
Indemnified Party under this Article IX.
(iv) The amount of any Loss for which
indemnification is provided hereunder shall be reduced by the portion
of such Loss which shall have been included as a deduction from Net
Working Capital in the Conclusive Net Working Capital and Capex
Statement.
(d) Survival of Representations and Warranties. The
------------------------------------------
representations and warranties of the parties will survive the Closing Date
and will remain in full force and effect thereafter until the second (2nd)
anniversary of the Closing Date; provided that the representations and
--------
warranties set forth in Section 2.9 (Tax Matters) shall survive the Closing
until the first (1st) anniversary of the Closing Date, the representations
and warranties set forth in Section 2.10 (Employee Benefits) shall survive
the Closing until the fifth (5th) anniversary of the Closing Date and the
representations and warranties contained in Sections 2.1, 2.2 and 2.4 (as it
relates to the PCS Contract or the Fosbrasil Supply Agreement), the first
sentence of Section 2.7(a), and Sections 2.24, 3.1, 3.2, 3.5, 4.1, 4.2 and
4.6 shall survive until the tenth (10th) anniversary of the Closing Date.
Any claim for indemnity made by a party under Section 9.1(a)(i)(A)(I),
Section 9.1(a)(i)(B)(I) or Section 9.1(b)(i)(A) in accordance with the terms
of this Article IX prior to the expiration of the survival period for the
relevant representation or warranty shall survive beyond such period until
finally and conclusively resolved. The covenants and agreements contained
herein shall survive indefinitely unless a shorter period is provided by
their terms.
(e) Notice and Opportunity to Defend. If there occurs an
--------------------------------
event which a party asserts is an indemnifiable event pursuant to Sections
9.1(a) or 9.1(b), the party or parties
76
seeking indemnification (the "Indemnified Party") shall notify the other
-----------------
party or parties obligated to provide indemnification (the "Indemnifying
------------
Party") promptly in writing specifying the facts constituting the basis for
-----
such claim and the amount, to the extent known, of the claim asserted. If
such event involves (i) any third party claim or (ii) the commencement of
any Proceeding by a third person (such third party claim and Proceeding
hereinafter referred to collectively as a "Third Party Claim"), the party
-----------------
seeking indemnification will give such Indemnifying Party prompt written
notice of such Third Party Claim; provided, however, that the failure to
-------- -------
provide prompt notice as provided herein (whether with respect to a Third
Party Claim or otherwise) will relieve the Indemnifying Party of its
obligations hereunder only to the extent that such failure prejudices the
Indemnifying Party hereunder. Such notice of a Third Party Claim shall
specify the facts constituting the basis for such claim and the amount, to
the extent known, of the claim asserted. The Indemnifying Party shall be
entitled to participate therein and to assume the defense thereof, with
counsel selected by the Indemnifying Party; provided that the Indemnifying
--------
Party notifies the Indemnified Party in writing of its election to assume
such defense within twenty (20) Business Days of receipt of notice from the
Indemnified Party of such Third Party Claim. After notice from the
Indemnifying Party to such party or parties seeking indemnification of such
election so to assume the defense thereof, the Indemnifying Party shall not,
except as provided in this clause (e), be liable to the Indemnified Party or
Indemnified Parties for any legal expenses of other counsel or any other
expenses subsequently incurred by such party or parties in connection with
the defense thereof; provided that, after such notice, the Indemnifying
--------
Party, regardless of whether it is otherwise required to indemnify the
Indemnified Party hereunder with respect to such Third Party Claim, shall be
responsible for the costs and fees of its attorneys and related litigation
expenses incurred by it in the prosecution of the defense of such Third
Party Claim. Notwithstanding the Indemnifying Party's election to so assume
the defense of any such Third Party Claim, the Indemnified Party shall have
the right to employ separate counsel (including local counsel) and
participate in (but not control) such defense, provided that, the
--------
Indemnifying Party shall bear the reasonable fees and expenses of such
separate counsel only if (x) the defendants in any such Third Party Claim
include both the Indemnified Party and the Indemnifying Party and the
Indemnified Party has legal defenses available to it which are different
from or additional to those available to the Indemnifying Party; provided
--------
that with respect to each Indemnified Party in such circumstance, the
Indemnifying Party shall not be required to bear the fees and expenses of
more than one firm of attorneys other than one firm of local counsel in each
jurisdiction where the primary counsel is not admitted to practice and where
local counsel is necessary, or (y) counsel for the Indemnifying Party shall
authorize in writing the Indemnified Party to employ separate counsel at the
expense of the Indemnifying Party. The Indemnifying Party and the
Indemnified Party agree to cooperate fully (regardless of which party has
assumed or is in control of the defense of such Third Party Claim and taking
into account issues of attorney-client privilege) with each other and their
respective counsel in connection with the defense, negotiation or settlement
of any such Third Party Claim, including providing access to any relevant
books and records, properties, employees, representatives and advisors. If
the Indemnifying Party assumes the defense of a Third Party Claim, no
settlement or compromise thereof may be effected (A) by the Indemnifying
Party without the written consent of the Indemnified Party (which consent
shall not be unreasonably withheld or delayed) unless (x) there is no
finding or admission of any violation of law or any violation of the rights
of any Person by any Indemnified Party and no adverse effect on any other
third party claims that may be made against any Indemnified Party, (y) such
settlement or compromise does not involve equitable or
77
other non-monetary relief binding upon any Indemnified Party and all relief
provided is paid or satisfied in full by the Indemnifying Party and (z) such
settlement or compromise provides for the unconditional release of the
Indemnified Party or (B) by the Indemnified Party without the consent of the
Indemnifying Party (which consent shall not be unreasonably withheld or
delayed) except to the extent such settlement or compromise involves
equitable or other non-monetary relief not binding on the Indemnifying Party
or its Affiliates and ten (10) Business Days' prior written notice is given
to the Indemnifying Party. In the conduct of the defense of any Third Party
Claim, the Indemnifying Party shall represent the interests of the
Indemnified Party in good faith and in a competent and diligent matter. If
at any time during the proceeding the Indemnifying Party determines that it
is more likely than not that the Indemnifying Party is not responsible to
indemnify the Indemnified Party hereunder for at least fifty percent (50%)
of the Indemnified Party's Losses in respect of such Third Party Claim, the
Indemnifying Party shall promptly notify in writing the Indemnified Party
and the Indemnified Party shall thereafter have the right to assume control
of the defense of such Third Party Claim with counsel selected by the
Indemnified Party (with the expense of such counsel being subject to
indemnification hereunder in accordance with the terms hereof). If the
Indemnifying Party elects not to assume the defense of a Third Party Claim,
the Indemnified Party may assume the defense of any such Third Party Claim
with counsel selected by the Indemnified Party, and the Indemnifying Party
shall bear reasonable fees and expenses of such counsel. In no event shall
an Indemnifying Party be liable for any settlement effected without its
written consent (which consent shall not be unreasonably withheld or
delayed). Notwithstanding anything herein to the contrary, a claim under
Section 9.1(a) or (b) to the extent relating to the breach of the
representations and warranties included in Section 2.14 (Environmental
Matters), or Retained Environmental Liabilities, Unknown Environmental
Liabilities or Buyer Environmental Liabilities in connection with an
environmental condition requiring investigation, remediation, removal or
other response actions at, on, in, from or about the Real Property shall
also be governed by the procedures set forth in Section 9.1(f)(iii). In the
event of a conflict between the procedures of this Section 9.1(e) and
Section 9.1(f)(iii), the procedures of Section 9.1(f)(iii) shall control
such claims.
(f) Environmental Claims.
--------------------
(i) The parties agree to cooperate with each
other to take all commercially reasonable actions to mitigate Losses
that would otherwise be subject to indemnification under Section 9.1(a)
or (b) to the extent relating to the breach of the representations and
warranties included in Section 2.14 (Environmental Matters), or
Retained Environmental Liabilities, or Unknown Environmental
Liabilities, or Buyer Environmental Liabilities, including not
soliciting or importuning any Governmental Authority to require any
environmental investigation, monitoring or remediation unless
affirmatively required to do so by Environmental Laws; provided such
--------
mitigation does not unreasonably disrupt the ongoing industrial business
operations of the Indemnified Party.
(ii) In addition to any other limitations on
indemnification that may apply, with respect to any claim for
indemnification that any of the Indemnified Parties may assert under
Sections 9.1(a)(i)(A)(I) or 9.1(a)(i)(B)(I) (to the extent relating to
the breach of the representations and
78
warranties included in Section 2.14 (Environmental Matters)) or
Sections 9.1(a)(i)(A)(III) or 9.1(a)(i)(B)(III) to the extent relating
to Retained Environmental Liabilities (other than with respect to the
Excluded Assets), or Section 9.1(b)(i)(E), neither the Seller nor the
Owners nor the Buyer, as applicable, shall have any obligation with
respect to any specific Losses for which indemnification is sought to
the extent such Losses:
(A) arise out of a breach of a covenant
under this Section 9.1(f);
(B) arise out of (1) any change in the
use of the Real Property from industrial use to residential,
non-industrial or non-commercial use following the Closing or
(2) any action to meet a cleanup or remedial standard under
Environmental Law at the Real Property that is more stringent or
costly than the minimum standard necessary for the continued
industrial use of any property or facility or (3) the initial
designation of a material as a Hazardous Material as a result of a
new Environmental Law promulgated after Closing; unless, with
respect to sections (1) or (2) of this paragraph, a more stringent
standard is affirmatively required by a Governmental Authority
pursuant to Environmental Law or by an Environmental Law or, in
light of the scope, magnitude and validity of a Third Party Claim
(other than by a Governmental Authority), is reasonably required
to resolve in good faith such Third Party Claim for which reasonable
prior written notice has been provided by the Indemnified Party
to the Indemnifying Party pursuant to Section 9.1(e);
(C) arise from any environmental
investigation, remediation, removal or other response action that
is not (1) affirmatively required by a Governmental Authority,
including a court of relevant jurisdiction acting within the
lawful scope of its authority, or (2) affirmatively required
pursuant to Environmental Laws, or (3) reasonably conducted, in
light of the scope, magnitude and validity of the claim, and in
good faith, upon prior written notice by the Indemnified Party to
the Indemnifying Party in response to a Third Party Claim (other
than by a Governmental Authority) received in writing by an
Indemnified Party, or (4) required for the lawful conduct of
Construction Activities undertaken in good faith for which Buyer
Indemnified Parties have consulted with a relevant Owner pursuant
to, and otherwise complied in all material respects with, Section
9.1(f)(iii)(F) below; or
(D) consist of the ordinary costs of
any post-Closing construction, demolition, excavation,
disturbance, renovation, expansion or refurbishment of any
facilities owned, leased or operated by the Buyer or any Affiliate
of Buyer, including any asbestos abatement obligations arising
from such activities, provided such activities are not otherwise
required pursuant to an investigation, remediation, removal or
other
79
response action required by a Governmental Authority or
required pursuant to Environmental Law or reasonably intrinsic to
and reasonably required to resolve in good faith, a Third Party
Claim (other than by a Governmental Authority), in light of the
scope, magnitude and validity of such claim, for which reasonable
prior written notice by the Indemnified Party has been provided to
the Indemnifying Party pursuant to Section 9.1(e).
(iii) In addition to any other applicable
requirements under this Agreement, any claim for indemnification in
connection with an environmental condition requiring investigation,
remediation, removal or other response action at, on, in from or about
the Real Property is subject to the following procedures:
(A) prior to first incurring costs with
respect to such claim, the Indemnified Party shall promptly notify
each Indemnifying Party of such claim in a reasonably detailed
written communication and shall afford each Indemnifying Party a
reasonable opportunity under the circumstances to evaluate the
conditions giving rise to such claim; provided, the Buyer
--------
shall not be in breach of its obligations under this Section
9.1(f)(iii)(A) if such notice or opportunity to evaluate cannot be
practicably given and the Buyer is required prior to such time to
undertake any reasonable emergency investigation, remediation,
removal or other reasonable emergency response action which is
necessary to prevent a material threat to public or employee
health, safety, or material injury to property, or an imminent and
substantial endangerment to the environment.
(B) the relevant Indemnifying Party
shall be entitled, but not obligated, to undertake and control,
with the Indemnified Party's reasonable participation, at its own
cost and expense as provided for in this Section 9.1(f), any
environmental investigation, remediation, removal or other
response action at or from the Real Property as to which an
Indemnified Party has asserted a claim for indemnification under
this Agreement (and any negotiations with Governmental Authorities
regarding same) with respect to such matter using commercially
reasonable efforts to minimize interference with the operations of
the Business or Real Property; the Indemnified Party shall afford
the relevant Indemnifying Party reasonable access to any relevant
property, facility, employee, representative or advisor reasonably
necessary for the relevant Indemnifying Party to undertake any
such investigation, remediation, removal or other response action,
subject to the following:
(C) in performing an indemnity obligation
hereunder, (1) the Indemnifying Party shall use commercially
reasonable efforts to mitigate interference with the Buyer's
operations and shall reasonably consult with Buyer regarding any
investigation, remediation, removal or other response action which
would reasonably be expected to materially interfere with the
Buyer's use of or operations at the relevant
80
Real Property; (2) the Indemnifying Party shall provide the Buyer
reasonable prior written notice of the Indemnifying Party's access
requirements; and (3) whichever party conducts the investigation,
remediation, removal or other response action shall (a) utilize a
consultant reasonably satisfactory to the other party; (b) use
commercially reasonable efforts to mitigate any damage to the Real
Property or personal property or harm to any persons; (c)
diligently perform or cause to be performed such on-site
activities to completion; (d) use commercially reasonable efforts
to keep the non-performing party informed of the progress of the
investigation, remediation, removal or response action and provide
the non-performing party with copies of any material results of
sampling and analytical data (including any status reports of work
in progress or reports required to be submitted to any Government
Authorities in connection with conducting the remediation); (e)
provide a reasonable opportunity to review and comment on any
submittal to Governmental Authorities and incorporate the
non-performing party's reasonable comments; (f) use commercially
reasonable efforts to provide the non-performing party with the
reasonable opportunity to observe the activities undertaken by or
on behalf of the performing party in implementing the
investigation, remediation, removal or other response actions; (g)
provide reasonable advance notice to the non-performing party of
any meetings with any Government Authorities concerning the
investigation, remediation, removal or other response action so
that the non-performing party may reasonably participate in such
meetings as consistent with the applicable obligations under
Section 9.1(f); (h) comply in all material respects with all
applicable Environmental Laws and other laws and Buyer's
reasonable health and safety requirements which have been provided
in writing to the Performing Party; (i) upon completion of any
investigation, remediation, removal or other response action,
reasonably repair (taking into account the nature and scope of the
investigation, remediation, removal or other response action
performed hereunder) adversely affected portions of the Real
Property to its pre-disturbed condition; and (j) and indemnify and
hold the non-performing party harmless for any Losses arising in
relation to any negligent or reckless act or omission by the
performing party, or its agents in performing any investigation,
remediation, removal or other response action under this
provision;
(D) the Buyer, the Seller and the Owners
shall exchange information relevant to this Section 9.1(f)
pursuant to the protection of a joint defense agreement and shall
otherwise reasonably cooperate, acting in good faith, in order to
facilitate the cost-effective resolution of any claim or matter
subject to this Section 9.1(f);
(E) provided it would not have a material
adverse effect on the industrial use or operations of the Real
Property or require the Buyer to incur material unindemnified
costs, to the extent that any one of them has the legal capacity
to do so, the Buyer Indemnified Persons shall,
81
at the relevant Indemnifying Party's reasonable request, impose
reasonable environmental deed or use restrictions, and/or accept
the relevant Indemnifying Party's installation and maintenance of
engineering controls on any Real Property subject to this Section
9.1(f); and
(F) Construction Activities. With
-----------------------
respect to any construction, demolition, excavation, disturbance,
renovation or refurbishment activity at or upon any Real Property
(collectively "Construction Activities"), the Buyer Indemnified
-----------------------
Persons shall (i) provide reasonable advance written notice to the
relevant Owner of any planned material Construction Activities
which would extend into the subsurface beyond the existing
"footprint" of buildings and other structures upon such facilities
and consult in good faith with the relevant Owner with respect to
the planning and implementation of any such Construction
Activities; and (ii) to the extent commercially reasonable, honor
any reasonable request by the relevant Owner for modifications to
the scope and implementation of any such Construction Activities
to prevent contact with Hazardous Materials or mitigate costs of
remedial actions, and take commercially reasonable actions in
undertaking the Construction Actions to mitigate Losses
indemnifiable by an Owner hereunder; provided such mitigation does
--------
not unreasonably disrupt the ongoing industrial business
operations of the Indemnified Party.
(iv) Subject to complying with the obligations of
an Indemnifying Party in Section 9.1(f)(iii), the Buyer Indemnified
Persons shall be entitled to undertake and control or elect to have the
Indemnifying Party undertake or control any investigation, remediation,
removal or response action (a) with respect to any matter governed by
the Buyer's indemnification under Section 9.1(b)(i)(E)(I) for Unknown
Environmental Liabilities for which the Buyer's share of the Losses is
greater than fifty percent (50%) or (b) with respect to any matter
governed by Section 9.1(b)(i)(E)(II) to the extent of any Buyer
Environmental Liabilities or (c) as otherwise provided in Section
9.1(e).
(v) Notwithstanding anything in Article IX to the
contrary, in any claim for indemnity for which notice is provided to
the Owners prior to the fifth (5th) anniversary of the Closing pursuant
to Sections 9.1(a)(i)(A) or 9.1(a)(i)(B) for a breach of the
representations and warranties in Section 2.14 or under Section
9.1(a)(i)(A)(III) or Section 9.1(a)(i)(B)(III) for Retained
Environmental Liabilities, in each case arising from or relating to the
Release or threat of Release of Hazardous Materials at, on, in, from,
about, under or migrating to the Real Property, the Release or threat
of Release shall be presumed to have first occurred or been in
existence prior to Closing unless the Owners rebut that presumption by
a preponderance of the evidence. Notwithstanding anything in Article IX
to the contrary, in any claim for indemnity for which notice is
provided to the Owners after the fifth (5th) but on or before the tenth
(10th) anniversary of the Closing pursuant to Section 9.1(a)(i)(A)(III)
or Section 9.1(a)(i)(B)(III) for Retained Environmental Liabilities, in
each case arising from or relating to the Release or threat of Release
of Hazardous Materials at, on, in, from, about, under or migrating to
the Real
82
Property, the Release or threat of Release shall be presumed to have
first occurred after the Closing unless the Buyer Indemnified Persons
rebut that presumption by a preponderance of the evidence.
(g) Payment. On each occasion that any Indemnified Party
-------
shall be entitled to indemnification or reimbursement under this Article IX,
the Indemnifying Party shall, at each such time, promptly pay the amount of
such indemnification or reimbursement. When applicable, in lieu of the
procedure provided for in the immediately preceding sentence, on each
occasion that any Indemnified Party shall be entitled to indemnification or
reimbursement from Solutia under this Article IX at a time when funds remain
in the General Escrow Account, Buyer and Solutia shall deliver to the Escrow
Agent a joint written instruction directing the Escrow Agent to deliver to
the Indemnified Person the amount of such indemnification or reimbursement
(or such lesser amount of funds as is in the General Escrow Account) from
the General Escrow Account. Neither the exercise of nor the failure to
exercise such right to give a notice of a claim under the Escrow Agreement
will constitute an election of remedies or limit the Buyer in any manner in
the enforcement of any other remedies that may be available to it. All
claims for indemnification made by the Buyer against Solutia under this
Article IX (i) during the pendency of Solutia's Chapter 11 bankruptcy
proceeding shall, to the extent due and payable, be treated as allowed
administrative expense claims against Solutia, paid in accordance with the
terms of this Agreement, and (ii) shall not be subject to discharge pursuant
to section 1141 of the Bankruptcy Code or otherwise, and shall be binding in
all respects upon, any successor-in-interest to Solutia (be it under a
confirmed Chapter 11 plan or a purchase agreement, any trustee appointed
under either Chapter 7 or Chapter 11 of the Bankruptcy Code, or otherwise).
(h) Investigation. Subject to Section 7.12(b), no right to
-------------
indemnification under this Article IX or any other rights under this
Agreement or any Transaction Document shall be limited or waived by reason
of (i) any investigation or audit conducted before or after the Closing by
any party hereto or (ii) the fact that such party knew or should have known
of any inaccuracy or breach of any representation, warranty, agreement or
covenant by the other party at any time, or the decision by such party to
complete the Closing. Notwithstanding anything to the contrary in this
Agreement, but subject to Section 7.12(b), (a) no investigation, inquiry or
examination by the Buyer, ICL or their representatives shall affect the
representations, warranties and covenants of the Seller and the Owners under
this Agreement or contained in any Transaction Document or any other
document, certificate or other writing or communication furnished or to be
furnished to the Buyer or ICL in connection with the transactions
contemplated hereby, (b) such representations, warranties and covenants
shall not be affected or deemed waived by reason of the fact that Buyer or
ICL knew or should have known that any of the same is or might be inaccurate
or breached in any respect, and (c) each of ICL, the Buyer, the Seller and
the Owners shall have the right, irrespective of any knowledge of or
investigation by such party, to rely fully on the representations,
warranties and covenants of the other parties contained in this Agreement or
any Transaction Document.
(i) Exclusive Remedy. Except as otherwise provided below, the
----------------
indemnification provided for in this Section 9.1, subject to the limitations
set forth herein or therein, shall be the exclusive post-Closing remedy
available to any Indemnified Party in connection with any Losses arising out
of the matters set forth in this Agreement or the transactions contemplated
hereunder (including any such remedy arising under CERCLA or any
83
other Environmental Laws which are hereby waived); provided, however, that
-------- -------
nothing herein will limit in any way any such party's (A) remedies in
respect of fraud or intentional and wrongful breach of a representation,
warranty or covenant or (B) rights hereunder to injunctive or other
equitable relief to enforce its rights under this Agreement or in connection
with the transactions contemplated hereby.
(j) No Right of Contribution. It is understood by the parties
------------------------
that the Seller and the Owners shall have no right of contribution against
the Subsidiaries in respect of any of the Owners' indemnification
obligations hereunder.
ARTICLE X
MISCELLANEOUS
10.1 Fees and Expenses.
-----------------
Except as otherwise specifically provided in this Agreement, each
of the Owners and the Seller and each of the Buyer and ICL shall bear its
own expenses in connection with the preparation and negotiation of this
Agreement and the Transaction Documents and the consummation of the
transactions contemplated by this Agreement and the Transaction Documents.
10.2 Governing Law.
-------------
This Agreement shall be construed under and governed by the laws
of the State of New York applicable to contracts made and to be performed
therein.
10.3 Amendment.
---------
This Agreement may not be amended, modified or supplemented except
upon the execution and delivery of a written agreement executed by the
Buyer, ICL, each of the Owners and the Seller.
10.4 Assignment.
----------
This Agreement may not be assigned by any party hereto without the
prior written consent of the other parties; provided, however, ICL and the
-------- -------
Buyer may assign this Agreement or any part thereof or any of its rights
hereunder to one or more direct or indirect subsidiaries of ICL, with
recourse, and additionally ICL and the Buyer (or any such subsidiary, if
applicable) may pledge, assign and grant to ICL's and the Buyer's (or such
subsidiary's) lenders, for the benefit of such lenders, a continuing
security interest and lien on all of ICL's, the Buyer's or such subsidiary's
right, title and interest in and to this Agreement and any and all related
agreements, as security for the payment and performance of all obligations
of ICL, the Buyer or such subsidiary to such lenders by reason of borrowings
or the guarantee of borrowings, or otherwise; provided, however, that ICL
-------- -------
and the Buyer shall not be released or discharged from any of its
obligations as "ICL" or "Buyer," respectively, under this Agreement or the
other Transaction Documents and any transactions contemplated by this
Agreement or the other Transaction Documents.
84
10.5 Waiver.
------
Any of the terms or conditions of this Agreement which may be
lawfully waived may be waived in writing at any time by any party which is
entitled to the benefits thereof. Any waiver of any of the provisions of
this Agreement by any party hereto shall be binding only if set forth in an
instrument in writing signed on behalf of such party. No failure to enforce
any provision of this Agreement shall be deemed to or shall constitute a
waiver of such provision and no waiver of any of the provisions of this
Agreement shall be deemed to or shall constitute a waiver of any other
provision hereof (whether or not similar) nor shall such waiver constitute a
continuing waiver.
10.6 Notices.
-------
Any notice, demand, or communication required or permitted to be
given by any provision of this Agreement shall be deemed to have been
sufficiently given or served for all purposes if (a) personally delivered,
when delivered, (b) mailed by certified first class mail, prepaid with
return receipt requested, on the earlier of the date actually delivered and
the fifth (5th) Business Day after mailing, (c) sent by a nationally
recognized overnight courier service, to the recipient at the address below
indicated, on the earlier of the date actually delivered and the third (3rd)
Business Day after sending or (d) delivered by facsimile which is confirmed
in writing by sending a copy of such facsimile to the recipient thereof when
confirmation thereof is received:
If to the Buyer or ICL:
Israel Chemicals Limited
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇
972-3-684-4434 (telecopier)
With a copy (which shall not constitute notice to the Buyer or ICL)
to:
Shavit Bar-On Gal-On Tzin Nov Yagur, Law Offices
Sonol Tower - 20th Floor
52 ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
972-3-791-2801 (telecopier)
85
With a copy (which shall not constitute notice to the Buyer or ICL)
to:
Dechert LLP
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ Tower
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
(▇▇▇) ▇▇▇-▇▇▇▇ (telecopier)
If to the Owners:
If to FMC:
FMC Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
(▇▇▇) ▇▇▇-▇▇▇▇ (telecopier)
With a copy (which shall not constitute notice to any Owner or
Seller) to:
▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
(▇▇▇) ▇▇▇-▇▇▇▇ (telecopier)
If to Solutia:
Solutia Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
(▇▇▇) ▇▇▇-▇▇▇▇ (telecopier)
With a copy (which shall not constitute notice to any Owner or
Seller) to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
Citigroup Center
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, Esq.
(▇▇▇) ▇▇▇-▇▇▇▇ (telecopier)
86
If to the Seller:
Astaris LLC
Creve Coeur IV
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
(▇▇▇) ▇▇▇-▇▇▇▇ (telecopier)
With a copy (which shall not constitute notice to any Owner or
Seller) to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
(▇▇▇) ▇▇▇-▇▇▇▇ (telecopier)
and with a copy to each Owner and its counsel as provided above,
or, in each case, to such other address as any party hereto may, from time
to time, designate in a written notice given in like manner.
10.7 Complete Agreement; Successors and Assigns.
------------------------------------------
This Agreement, the Confidentiality Agreement, the Transaction
Documents and the other documents and writings referred to herein or
delivered pursuant hereto contain the entire understanding of the parties
with respect to the subject matter hereof and thereof and supersede all
prior agreements and understandings, both written and oral, between the
parties with respect to the subject matter hereof and thereof. Subject to
the approval of the Bankruptcy Court, solely with respect to Solutia, this
Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and permitted assigns. The
obligations set forth herein, insofar as they do not require approval from
the Bankruptcy Court (including the provisions of Section 7.13), shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns whether or not approval from the
Bankruptcy Court shall have been obtained with respect to any obligations
that require such approval. Notwithstanding the foregoing, Solutia's
obligations herein shall be subject to the approval of the Bankruptcy Court
with respect to the matters not covered by the Initial Relief Order.
10.8 Counterparts.
------------
This Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same agreement and each of which shall
be deemed an original.
10.9 Publicity.
---------
The Seller and each Owner and the Buyer and ICL will consult with
each other prior to any publication or press release of any nature with
respect to this Agreement or the
87
transactions contemplated hereby and shall not make or issue, or cause to be
made or issued, any such publication or press release prior to such
consultation and without the prior written consent of the other parties
hereto (which consent will not be unreasonably withheld or delayed) except
to the extent, but only to such extent, that such announcement or statement
may be required by Law, any order or regulation of a court or tribunal or
Governmental Authority (including the Bankruptcy Court), any listing
agreement with any securities exchange or any securities exchange
regulation, in which case the party proposing to issue such publication or
press release shall make all reasonable efforts to consult in good faith
with the other parties before issuing any such publication or press release
and shall provide a copy thereof to the other parties prior to such
issuance.
10.10 Interpretive Provisions.
-----------------------
(a) Certain Definitions. As used in this Agreement, the following
-------------------
terms have the following meanings:
"2004 Balance Sheet" shall have the meaning set forth in Section
------------------
2.3(a).
"Acquired Assets" shall mean all of the Seller's and the
---------------
Subsidiaries' rights, title and interest in, to and under (and, in the
case of the Equity Interests in Astaris Brasil held by Solutia or its
subsidiary, Solutia's or such subsidiary's rights, title and interest
in, to and under) all of the properties, rights and assets
constituting, or used or held for use in, the Business, of every
nature, kind and description existing on the Closing Date, other than
Excluded Assets, wherever such assets, properties and rights are
located and whether such assets, properties and rights are real,
personal or mixed, tangible or intangible, and whether or not any of
such assets, properties and rights have any value for accounting
purposes or are carried or reflected on or specifically referred to in
Seller's' books or financial statements, whether accrued, contingent or
otherwise and whether now existing or hereafter acquired, including all
of the assets, properties and rights of the Business enumerated below
(other than Excluded Assets):
(i) all real property, leaseholds and subleaseholds
therein, together with all fixtures, fittings, buildings, structures
and other improvements erected thereon, and easements, rights of way,
water lines, uses, licenses, hereditaments, tenements, privileges and
other appurtenances thereto (such as appurtenant rights in and to
public streets), of the Seller, including the Owned Real Property and
Leased Real Property (collectively, the "Real Property");
-------------
(ii) all (A) machinery, equipment, computer
hardware, vehicles (including trucks, tractors and trailers), goods,
furnishings, jigs, tools, dies, molds, forms, furniture, fixtures,
supplies, spare and repair parts, stores, rolling stock and other
tangible personal property, wherever located, in transit or otherwise
(the "Owned Equipment and Other Tangible Personal Property") including
----------------------------------------------------
the Owned Equipment and Other Tangible Personal Property listed on
Section 1.1(a)(ii)(A) of the Disclosure Schedule, (B) rights, title and
interest in machinery, equipment, computer hardware, vehicles
(including trucks, tractors and trailers), goods, furnishings, jigs,
tools, dies, molds, forms, furniture, fixtures, supplies, spare and
repair parts, stores, rolling stock and other tangible personal
88
property, wherever located, in transit or otherwise, leased by Seller
pursuant to a Contract (the "Leased Equipment and Other Tangible
-----------------------------------
Personal Property" and, collectively with the Owned Equipment and Other
-----------------
Tangible Personal Property, the "Equipment and Other Tangible Personal
-------------------------------------
Property"), including the Leased Equipment and Other Tangible Personal
--------
Property listed on Section 1.1(a)(ii)(B) of the Disclosure Schedule and
(C) rights to the warranties and licenses received from manufacturers,
sellers and/or lessors of the Equipment and Other Tangible Personal
Property;
(iii) all inventory, wherever located, in transit
or otherwise, including raw materials, works-in-progress, finished
goods, consigned goods, supplies, storehouse stocks, scrap, wrappings,
supply and packaging items, containers, and spare parts (collectively,
the "Inventory");
---------
(iv) all accounts, notes, and other receivables
(including intercompany accounts receivable or other intercompany
advances);
(v) [intentionally deleted];
(vi) all Seller Intellectual Property and goodwill
associated with the Business, licenses and sublicenses granted and
obtained with respect thereto, and rights and remedies against
infringements thereof, and rights to protection of interests therein
under the Laws of all jurisdictions, including all such property more
particularly described in Sections 2.12(a) and (b) of the Disclosure
Schedule;
(vii) subject to Section 1.7 hereof, (A) all
contracts, agreements and instruments (written or oral) relating to the
sale of any assets, services, properties, materials or products,
including all customer contracts, operating contracts, distribution and
sales representative contracts; (B) all orders, contracts, supply
agreements and other agreements relating to the purchase of any assets,
services, properties, materials, or products; and (C) all other
contracts, agreements, and instruments (written or oral) (all such
contracts, agreements and instruments described in clauses (A), (B) and
(C), the "Contracts"), including all such Contracts more specifically
---------
listed or described in Section 2.13(a) of the Disclosure Schedule;
(viii) subject to Section 1.7 hereof, all
transferable Permits (including Seller Permits and Environmental
Permits) and all pending applications therefor, including all Permits
more specifically listed or described in Section 1.1(a)(viii) of the
Disclosure Schedule;
(ix) all rights relating to credits, prepaid
expenses, deferred charges, advance payments, security deposits and
prepaid items;
(x) all books, records, ledgers, files, documents
(including originally executed copies of all Contracts),
correspondence, Tax Returns (relating solely to the Business)
memoranda, forms, lists, plats, architectural plans, drawings, and
specifications, new product development materials, creative materials,
advertising and promotional materials, studies and reports, whether in
hard copy or magnetic format (the "Books and Records");
-----------------
89
(xi) all causes, rights or choses in action,
lawsuits, judgments, claims and demands of any nature, whether ▇▇▇▇▇▇
or inchoate, known or unknown, contingent or otherwise, including third
party warranties, indemnities and guarantees and other similar rights
as to third parties held by or in favor of the Seller or the
Subsidiaries with respect to any of the Acquired Assets and not with
respect to any Retained Liability;
(xii) all notes, bonds and other evidences of
indebtedness (but not cash equivalents) of any Person held by the
Seller, Equity Interests of Astaris Brasil and Astaris Europe held by
the Seller, Equity Interests of Astaris Canada and Astaris Europe held
by Astaris International and Equity Interests of Fosbrasil held by
Astaris Brasil;
(xiii) all rights to insurance and condemnation
proceeds relating to the damage, destruction or impairment of assets,
properties or other rights described in this paragraph (xiii), which
damage, destruction or impairment occurs on, prior to or after the
Closing, and all such rights to the extent they relate to Losses
indemnifiable pursuant to Section 9.1(a);
(xiv) all Emission Reduction Credits and similar
credits relating to facilities that are Acquired Assets issued by the
respective districts or other Governmental Authorities having
jurisdiction over such facilities either earned (regardless of when
applied for, ordered, granted or issued) prior or subsequent to the
Closing Date with respect to the Business or Acquired Assets but not
fully used by the Seller or the Subsidiaries prior to the Closing Date;
provided that if the Seller or a Subsidiary is or otherwise becomes
--------
entitled to be an owner of or otherwise to have any interest in any
such credits as described above, it shall transfer the whole of such
interest to the Buyer or its designee and execute and deliver such
further instruments and documents as the Buyer reasonably requests in
order to apply for, assign or effect the transfer of any such credits;
(xv) all Tax refunds with respect to Assumed
Liabilities;
(xvi) all other assets and properties reflected on
the Conclusive Net Working Capital and Capex Statement; and
(xvii) all rights to the name "Astaris."
"Acquisition Transaction" shall have the meaning
-----------------------
set forth in Section 7.13.
"Additional Monsanto Supply Agreement Environmental
--------------------------------------------------
Costs" shall mean any Monsanto Supply Agreement Environmental Costs
-----
that are included in the calculation of Actual Cost (as defined in the
Monsanto Supply Agreement) charged to the Buyer under the Monsanto
Supply Agreement; provided that Additional Monsanto Supply Agreement
--------
Environmental Costs shall not include any cost that was included in the
calculation of Actual Cost charged to the Seller under the Monsanto
Supply Agreement as of the Closing Date, whether or not such costs
continue to be included after the Closing Date, other than any Monsanto
Supply Agreement Environmental Costs that to the Knowledge of the
Seller have arisen since December 31, 2004 (including any Monsanto
Supply Agreement Environmental Costs arising out of the items set forth
in
90
Section 2.13(d) of the Disclosure Schedule); provided, further, that
-------- -------
Additional Monsanto Supply Agreement Environmental Costs shall not
include any Monsanto Supply Agreement Environmental Costs charged to
the Buyer (x) on or after May 31, 2010, or on or after such earlier
date on which the Monsanto Supply Agreement is terminated or (y) to the
extent attributable to any modification of the Monsanto Supply
Agreement after Closing by the Buyer and Monsanto. For the purposes of
this definition, "Monsanto Supply Agreement Environmental Costs" shall
---------------------------------------------
mean any environmental remediation costs, fines, penalties, judgments
and amounts paid in settlement, attorneys' fees and expenses or other
fees and expenses incurred by the Company (as defined in the Monsanto
Supply Agreement) for (i) Third Party Liabilities (as defined in the
Monsanto Supply Agreement) attributable to the period between May 31,
2000 and the Closing Date and (ii) ongoing operational costs of
compliance with environmental regulations and maintaining environmental
permits at the Company Facilities. The parties agree that, as among
themselves, the amount of any Additional Monsanto Supply Agreement
Environmental Costs shall be determined in accordance with the
procedures set forth in Section 7.24.
"Affiliate" shall mean, with respect to any
---------
specified Person, any other Person that directly, or indirectly through
one or more intermediaries, Controls, is Controlled by, or is under
common Control with, such specified Person.
"Agreement" shall have the meaning set forth in
---------
the preamble to this Agreement.
"Agrium Agreement" means that certain agreement,
----------------
by and between Astaris Production LLC and Nu-West Industries Inc.,
dated as of March 5, 2004.
"Antitrust Division" shall have the meaning set
------------------
forth in Section 7.3(a).
"Applicable Accounting Principles" shall have the
--------------------------------
meaning set forth in Section 1.4(b).
"Approval Motion" shall have the meaning set forth
---------------
in Section 7.10(a).
"Approval Order" means an order (a) that among
--------------
other things, (i) authorizes and directs Solutia, pursuant to section
363 of the Bankruptcy Code, solely in its capacity as the owner of 50%
of the Equity Interests in the Seller and in accordance with the terms
of the Astaris LLC Agreement, to consent to the Seller entering into
this Agreement and consummating the transaction contemplated hereby and
the provisions hereof, including the sale of the Acquired Assets, (ii)
provides that Solutia shall be bound by all of the terms of this
Agreement that relate to, or impose any obligations upon, Solutia,
including Solutia's indemnification obligations as set forth in Article
IX of this Agreement, (iii) includes a finding that the Acquired Assets
are not subject to the claims of Solutia's creditors or interest
holders in their capacity as creditors and interest holders of Solutia,
(iv) provides that the sale of the Acquired Assets to the Buyer shall
be free and clear of all liens, claims and interests of Solutia or of
any creditor or equity holder of Solutia, as such liens and claims are
against, and interests are in, Solutia, provided that
91
such liens, claims, and interests may attach or apply to the proceeds
of the sale of the Acquired Assets, and (v) provides that Solutia and
all of its creditors and equity holders are forever barred, estopped,
and permanently enjoined from asserting against the Buyer, its
successors or assigns, and their respective property, or assets
(including the Acquired Assets), all of such parties' respective liens
and claims against, and interests in, Solutia, (b) with respect to
which Solutia has used commercially reasonable and good faith diligent
efforts to have included therein the following findings: (x) based on
evidence presented by the Buyer or its authorized representative to the
Bankruptcy Court that is reasonably acceptable to Solutia, the Buyer is
a good faith purchaser and (y) the Acquired Assets are not property of
Solutia or Solutia's estate and (c) that does not contain any other
findings or provisions that could adversely affect any of the findings
or provisions set forth in clause (a) or (b) above.
"Assumed Benefit Plans" shall have the meaning set
---------------------
forth in Section 7.5(d)(i).
"Assumed CBA" shall mean each of the (i) Agreement
-----------
between Astaris LLC - Lawrence, Kansas Plant, and International
Chemical Workers Union Council/UFCW, Local 605C, AFL-CIO, CLC, dated
November 1, 2004; (ii) Agreement between Astaris LLC - Carteret, NJ
Plant, and International Chemical Workers Union Council Local No. 144c,
AFL-CIO, dated November 9, 2004; and (iii) Agreement between Astaris
LLC - Carondelet, MO Plant, and International Chemical Workers Union
Council Local No. 81c, AFL-CIO, dated August 1, 2004.
"Assumed Liabilities" shall have the meaning set
-------------------
forth in Section 1.1(b).
"Astaris" shall have the meaning set forth in the
-------
preamble to this Agreement.
"Astaris Brasil" shall have the meaning set forth
--------------
in the recitals to this Agreement.
"Astaris Canada" shall have the meaning set forth
--------------
in the recitals to this Agreement.
"Astaris Europe" shall have the meaning set forth
--------------
in the recitals to this Agreement.
"Astaris Idaho LLC" shall mean Astaris Idaho LLC,
-----------------
a Delaware limited liability company.
"Astaris International" shall have the meaning set
---------------------
forth in the recitals to this Agreement.
"Astaris LLC Agreement" shall mean the Limited
---------------------
Liability Company Agreement of Astaris LLC, dated as of April 1, 2000,
as amended.
"ASTARIS Marks" shall have the meaning set forth
-------------
in Section 7.15(a).
92
"Astaris Production LLC" shall mean Astaris
----------------------
Production LLC, a Delaware limited liability company.
"Audited Financial Statements" shall have the
----------------------------
meaning set forth in Section 2.3(a).
"Bankruptcy Code" shall have the meaning set forth
---------------
in the recitals to this Agreement.
"Bankruptcy Court" shall have the meaning set
----------------
forth in Section 5.5.
"Bankruptcy Negotiation Order" shall mean a
----------------------------
Governmental Order of the Bankruptcy Court requiring Solutia or
its Representatives to take any Negotiation Actions.
"Basket" shall have the meaning set forth in
------
Section 9.1(a)(ii).
"Benefit Contracts" shall have the meaning set
-----------------
forth in Section 7.5(d)(i).
"Benefit Plans" shall have the meaning set forth
-------------
in Section 2.10(a).
"Books and Records" shall have the meaning set
-----------------
forth in the definition of Acquired Assets.
"Business" means the business and activities
--------
conducted by the Seller and the Subsidiaries on and after the date
hereof and through the Closing Date, including the business of
developing, producing, manufacturing, marketing and selling products
and services relating to phosphorus, phosphorus derivatives, phosphoric
acids, Phosphate Salts and blends or mixtures of Phosphate Salts for
markets including the food and beverage salts and acids market
(including for pharmaceuticals, pet food, personal care products,
dental care products, fats and oils, fermentation, starch modification,
meats, poultry, seafood, bakery products, dairy and cheese products and
nutrition additives and beverages), the technical and industrial salts
and acids market (including Phosphate Salts in applications including
chemical processing, specialty fertilizers, refractory/tile,
antifreeze, pulp and paper, activated carbon, paints and coatings,
detergents and cleaners, surface treatment, metal treatment, textile
processing, water treatment, animal feed and construction materials),
the phosphorus and derivatives market (including phosphorus
pentasulfide and elemental phosphorus in applications including
pesticides, motor and drive train fluids, fumigants, electronic
materials and motor oil additives), the specialty acids market
(including semiconductor grades and polyphosphoric acid grades for
applications including flat panel displays and asphalt) and the fire
safety market (including ammonium polyphosphate and formulations
thereof for applications including fire retardants, suppressants and
extinguishers), through various plants, facilities and offices
including those located in Lawrence, Kansas, Carteret, New Jersey,
Carondelet, Missouri, Ontario, California, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Missouri,
Creve Coeur, Missouri, Milan, Italy, Sao ▇▇▇▇ dos ▇▇▇▇▇▇, Brazil, and
Cajati, Brazil.
93
"Business Day" shall mean any day other than a
------------
Saturday, Sunday, or a day on which banking institutions in New York
City are authorized or obligated by law, regulation or executive order
to close; provided that if the date of receipt by the Buyer or ICL of
--------
any notice or communication delivered pursuant to the terms hereof
falls on a Business Day on which banking institutions in Israel are
authorized or obligated by law, regulation or executive order to close
("Israeli Bank Holiday"), such date of receipt shall be deemed to be
--------------------
the next Business Day thereafter that is not an Israeli Bank Holiday.
"Business Financial Statements" shall have the
-----------------------------
meaning set forth in Section 2.3(b).
"Buyer" shall have the meaning set forth in the
-----
preamble to this Agreement.
"Buyer Basket" shall have the meaning set forth in
------------
Section 9.1(b)(ii).
"Buyer Breach" shall have the meaning set forth in
------------
Section 8.1(e).
"Buyer Cap" shall have the meaning set forth in
---------
Section 9.1(b)(ii).
"Buyer Environmental Liabilities" shall mean any
-------------------------------
and all Liabilities asserted against or reasonably incurred by the
Seller or the Owners or their Affiliates to the extent arising out of
or related to: (i) environmental conditions constituting the Release,
threat of Release or exposure to Hazardous Materials (A) first
occurring after the Closing Date caused by the Buyer or in connection
with the operation of the Acquired Assets or caused by any Person at,
on, in, from, about, under or migrating to any property now or
subsequently owned, operated or leased by a Buyer Person with respect
to the Acquired Assets, or (B) arising out of or related to the
Exacerbation by the Buyer of a Release, threat of Release or exposure
to Hazardous Materials first occurring prior to Closing but only to the
extent of the Liabilities arising out of or related to the
Exacerbation, in either case at, on, in, from, about or under any Real
Property or any property now or subsequently owned, operated or leased
by a Buyer Person in connection with the operation of the Acquired
Assets, whether into the air, soil, ground or surface waters on-site or
off-site; or (ii) the off-site storage, treatment, recycling, disposal
or arrangement for disposal after the Closing Date of Hazardous
Materials Managed or Released with respect to the Acquired Assets
(other than by or on behalf of the Seller or the Owners or their
Affiliates after the Closing); or (iii) any violation of any
Environmental Laws in connection with the operation of the Acquired
Assets (including costs and expenses for pollution control or
monitoring equipment and operating and maintenance required to bring
the Acquired Assets into compliance with Environmental Laws and fines,
penalties and defense costs) first occurring or to the extent, but only
to the extent, Exacerbated by the Buyer after the Closing Date; in each
case except to the extent that any such Liability is attributable to
actions taken by any Seller Person, is otherwise a Retained
Environmental Liability or constitutes a Loss for which Owners are
required to indemnify the Buyer under Article IX hereof. The provision
of services and standard of liability for such services performed
pursuant to the Transition Services Agreement shall be as set forth in
the Transition Services Agreement.
94
"Buyer Indemnified Persons" shall have the meaning
-------------------------
set forth in Section 9.1(a)(i).
"Buyer Person" shall mean ICL, the Buyer and their
------------
Covered Affiliates.
"Buyer's Transaction Expenses" shall mean all
----------------------------
reasonable out-of-pocket expenses incurred by the Buyer in connection
with the negotiation, execution and delivery, and performance of this
Agreement (including the Disclosure Schedule and exhibits hereto),
including reasonable fees and expenses of counsel, accountants,
consultants and other advisers, and any filing fees paid under the HSR
Act.
"Cap" shall have the meaning set forth in Section
---
9.1(a)(ii).
"Capex Shortfall Amount" shall mean the Capex
----------------------
Target Amount minus the Capex Actual Amount. "Capex Target Amount"
----- -------------------
shall mean 95% of the cumulative total amount of capital expenditures
set forth on Section 10.10(a)(11) of the Disclosure Schedule hereof
from January 1, 2005 to and including the Closing Date (with the amount
of capital expenditures for any part of a month being determined on a
pro rata basis for the number of days up to and including the Closing
Date) (the "Specified Period"). "Capex Actual Amount" shall mean the
---------------- -------------------
cumulative total amount of capital expenditures actually spent by the
Seller during the Specified Period (excluding open commitments or other
deferred purchase obligations) for the capital projects listed on
Section 10.10(a)(11) of the Disclosure Schedule hereof which are
included in the Acquired Assets or are assets of Astaris Brasil,
Astaris Canada or Astaris Europe. If the Closing does not occur during
2005, the Capex Target amount for any period ending in 2006 shall be
calculated using a capital expenditure budget for 2006, including a
list of specified capital projects, that is prepared by Seller
consistent with past practice and agreed to by the Buyer. Seller shall
provide its proposed 2006 capital expenditure budget to Buyer no later
than November 30, 2005. If the parties are unable to agree on the
capital expenditure budget for 2006, the Capex Target Amount shall be
calculated using the same monthly amounts as set forth in Section
10.10(a)(11) of the Disclosure Schedule for the same months of 2005.
"Carteret Agreement" shall have the meaning set
------------------
forth in Section 7.11.
"Cash" shall mean the sum of cash, cash
----
equivalents and liquid investments, plus all deposited but uncleared
bank deposits and less all outstanding checks of the Seller and the
Subsidiaries.
"CERCLA" means the federal Comprehensive
------
Environmental Response, Compensation and Liability Act, as
amended.
"CERCLIS" means the Comprehensive Environmental
-------
Response, Compensation and Liability Information System.
"Closing" shall have the meaning set forth in
-------
Section 1.3(a).
"Closing Date" shall have the meaning set forth in
------------
Section 1.3(a).
95
"Code" shall mean the Internal Revenue Code of
----
1986, as amended.
"Competition/Investment Law" shall have the
--------------------------
meaning set forth in Section 2.4.
"Conclusive Monsanto Costs Statement" shall have
-----------------------------------
the meaning set forth in Section 7.24(b).
"Conclusive Net Working Capital and Capex
----------------------------------------
Settlement Date" shall have the meaning set forth in Section 1.4(d).
---------------
"Conclusive Net Working Capital and Capex
----------------------------------------
Statement" shall have the meaning set forth in Section 1.4(c)(ii).
---------
"Confidential Information of the Business" shall
----------------------------------------
mean all trade secrets, other confidential information, and
confidential data, know-how, systems and procedures of a technical or
sensitive nature in any form relating to the Acquired Assets, the
Business or customers of the Business, including all confidential
business and marketing plans, marketing and financial information,
pricing, profit margin, cost and sales information, operations
information, forms, contracts, bids, agreements, legal matters,
unpublished written materials, names and addresses of customers and
prospective customers, information about employees, suppliers and other
companies with which the Business has a commercial relationship, plans,
methods, concepts, technical information, computer programs or software
in various stages of development, passwords, source code listings and
object codes.
"Confidentiality Agreement" means the
-------------------------
Confidentiality Agreement, dated as of December 16, 2004, by and
among ICL, Astaris, FMC and Solutia, as amended.
"Consent" means each governmental and other
-------
consent, approval, authorization, waiver, certificate, exemption,
order, registration, declaration, clearance, filing or notice of, with
or to any Person, or the expiration or termination of the waiting
period under any Competition/Investment Law.
"Consent Order" shall have the meaning set forth
-------------
in Section 2.4.
"Consent Order Notification" means the notice
--------------------------
required by the Consent Order in connection with the transactions
contemplated by this Agreement.
"Construction Activities" shall have the meaning
-----------------------
set forth in Section 9.1(f)(iii)(F).
"Contracts" shall have the meaning set forth in
---------
the definition of Acquired Assets.
"Control" shall mean the possession, directly or
-------
indirectly, of the power to direct or cause the direction of the
management or policies of a Person, whether through
96
the ownership of Equity Interests, by contract or otherwise. The terms
"Controlling" and "Controlled" shall have meanings correlative to the
----------- ----------
foregoing.
"Co-Owned Patents" shall have the meaning set
----------------
forth in Section 7.23(b).
"Covered Affiliate" shall mean, with respect to
-----------------
any Person, any subsidiary of such Person and any Person that is
Controlled by such Person or subsidiary.
"Credit Agreement" shall mean the Credit
----------------
Agreement, dated as of February 8, 2005, among the Seller, the Lenders
and Issuers party thereto, Citicorp USA, Inc., as administrative agent,
Bank of America, N.A., as syndication agent, LaSalle Business Credit,
LLC, as documentation agent, and Citigroup Global Markets Inc., as sole
book manager and arranger, as amended.
"Debt Obligations" shall, as applied to any
----------------
Person, mean, without duplication, (i) all indebtedness for borrowed
money, (ii) all obligations evidenced by a note, bond, debenture or
similar instrument, including Astaris' obligations to the Owners
arising out of the practice of deferring payment of certain receivables
to the Owners, which practice the Board of Management of Astaris
authorized on February 2, 2005, (iii) that portion of obligations with
respect to capital leases that is properly classified as a liability on
a balance sheet in conformity with GAAP, applied on a consistent basis
with the Audited Financial Statements and (iv) any obligation owed for
all or any part of the deferred purchase price for the purchase of a
business. For clarification, it is understood that letters of credit
and similar credit support obligations shall not constitute "Debt
Obligations" hereunder.
"Disclosure Schedule" shall mean the disclosure
-------------------
schedule, together with the exhibits and schedules attached to it,
being delivered simultaneously with the execution of this Agreement and
forming a part of this Agreement.
"Disputed Items" shall have the meaning set forth
--------------
in Section 1.4(c)(i).
"Effective Time" means 11:59 P.M., Central Time,
--------------
on the Closing Date.
"Employees" shall mean all Union Employees,
---------
Non-Union Employees and Non-U.S. Employees, collectively.
"Encumbrances" means any options, pledges,
------------
mortgages, security interests, liens, charges, claims, conditional sale
agreements or other title retention agreements, leases, restrictions on
voting or transfer, rights of first refusal, options, restrictions,
tenancies, licenses, encroachments, occupancies, covenants, rights of
way, easements, conditions or other encumbrances or matters of title of
any nature (including the filing of, or agreement to give, any
financing statement under the Uniform Commercial Code or statute or law
of any jurisdiction).
"Environmental Laws" means all applicable foreign,
------------------
federal, state and local statutes, regulations, rules, ordinances,
orders, decrees and laws (including common law) as in effect at the
applicable time relating to Hazardous Materials, pollution or
protection
97
of the environment or, to the extent relating to exposure to Hazardous
Materials, human health.
"Environmental Permits" means all Permits issued
---------------------
by Governmental Authorities that are required under Environmental Laws
in connection with the Business and the Acquired Assets.
"Equity Interest" shall mean (i) the shares of
---------------
capital stock of a corporation, (ii) the general or limited partnership
interests in any partnership, (iii) the membership or other ownership
interest in any limited liability company, (iv) the equity securities
of or other ownership interests or rights in any other legal entity, or
(v) any option, warrant or other right to convert into or otherwise
receive any of the foregoing, in any such case, whether owned or held
beneficially or legally.
"ERISA" shall have the meaning set forth in
-----
Section 2.10(a).
"ERISA Affiliate" shall have the meaning set forth
---------------
in Section 2.10(c).
"Escrow Agent" shall have the meaning set forth in
------------
Section 1.2(b)(i).
"Escrow Agreement" shall have the meaning set
----------------
forth in Section 1.2(b)(i).
"Estimated Capex Shortfall Amount" shall have the
--------------------------------
meaning set forth in Section 1.4(a)(i).
"Estimated Closing Statement" shall have the
---------------------------
meaning set forth in Section 1.4(a)(i).
"Estimated Net Working Capital" shall have the
-----------------------------
meaning set forth in Section 1.4(a)(i).
"Estimated Net Working Capital Deficiency Amount"
-----------------------------------------------
shall have the meaning set forth in Section 1.4(a)(ii).
"Estimated Net Working Capital Excess Amount"
-------------------------------------------
shall have the meaning set forth in Section 1.4(a)(ii).
"Exacerbation" means the knowing worsening of a
------------
condition by affirmative action or the willful failure to act. For the
avoidance of doubt, Exacerbation shall not include any good faith
action taken by the Buyer or any Affiliate of the Buyer in the use or
operation of the Acquired Assets or the Business that is not materially
inconsistent with the obligations of Section 9.1(f)(i).
"Exception Documents" shall have the meaning set
-------------------
forth in Section 2.16(c)(i).
"Exchange Act" shall have the meaning set forth in
------------
Section 2.4.
98
"Excluded Assets" shall mean the assets,
---------------
properties and rights of Seller specifically listed in Section
10.10(a)(1) of the Disclosure Schedule.
"Excluded Astaris Assets" shall mean those
-----------------------
Excluded Assets that are neither Excluded FMC Assets nor Excluded
Solutia Assets.
"Excluded Contracts" shall mean those contracts,
------------------
agreements and instruments specifically listed in Section
10.10(a)(1) of the Disclosure Schedule.
"Excluded Facilities" shall have the meaning set
-------------------
forth in Section 10.10(a)(1) of the Disclosure Schedule.
"Excluded FMC Assets" shall mean those Excluded
-------------------
Assets that relate to the assets, properties and rights
contributed to Astaris or its Subsidiaries by FMC that are set
forth on Section 10.10(a)(2) of the Disclosure Schedule.
"Excluded Master Lease Obligations" shall mean the
---------------------------------
obligations of any Seller Person under the FMC Master Lease and
Operating Agreement.
"Excluded Solutia Assets" shall mean those
-----------------------
Excluded Assets that relate to the assets, properties and rights
contributed to Astaris or its Subsidiaries by Solutia that are set
forth on Section 10.10(a)(3) of the Disclosure Schedule.
"Expense Reimbursement" shall have the meaning set
---------------------
forth in Section 8.2(b).
"Field of Agreement" shall mean the research,
------------------
development, production, manufacture, marketing, distribution and
sale of Phosphorus Chemicals, other than as required or expressly
permitted pursuant to the Sauget Supply Agreement.
"Filing Date" shall have the meaning set forth in
-----------
Section 7.10(a).
"Final Net Working Capital Deficiency Amount"
-------------------------------------------
shall have the meaning set forth in Section 1.4(d)(ii).
"Final Net Working Capital Excess Amount" shall
---------------------------------------
have the meaning set forth in Section 1.4(d)(iii).
"Final Order" shall mean a Governmental Order, the
-----------
operation or effect of which is not stayed, and as to which
Governmental Order (or any revision, modification, or amendment
thereof), the time to appeal or seek review or rehearing has
expired, and as to which no appeal or petition for review or
motion for rehearing, reconsideration, or reargument has been
taken or been made and is pending.
"FMC" shall have the meaning set forth in the
---
preamble to this Agreement.
99
"FMC Asset Transfer Agreement" means the Asset
----------------------------
Transfer Agreement dated as of April 1, 2000, by and among FMC,
Astaris, Astaris Production LLC, Astaris Idaho LLC and FMC Properties
LLC.
"FMC Contributed Facilities" shall mean the
--------------------------
facilities set forth on Section 10.10(a)(4) of the Disclosure Schedule.
"FMC Master Lease and Operating Agreement" shall
----------------------------------------
mean the Master Lease and Operating Agreement, dated as of April 1,
2000, by and between Astaris and FMC.
"Foreign Plans" shall have the meaning set forth
-------------
in Section 2.10(l).
"Foret" shall mean FMC ▇▇▇▇▇, ▇.▇., a corporation
-----
(sociedad anonima) incorporated under the laws of Spain.
"Formation Date" shall mean April 1, 2000.
--------------
"Former Employee" shall mean all Former Union
---------------
Employees, Former Non-Union Employees and Former Non-U.S. Employees,
collectively.
"Former Non-Union Employee" shall mean all
-------------------------
individuals as to whom an employer-employee relationship with the
Seller existed prior to the Closing Date and who is not covered by an
Assumed CBA, but such relationship does not exist on the Closing Date.
"Former Non-U.S. Employee" shall mean all
------------------------
individuals as to whom an employer-employee relationship with Astaris
Brasil, Astaris Europe, Astaris Canada or Astaris International existed
prior to the Closing Date but which relationship does not exist on the
Closing Date.
"Former Union Employee" shall mean all individuals
---------------------
as to whom an employer-employee relationship with the Seller existed
prior to the Closing Date and whose terms and conditions of employment
were subject to an Assumed CBA, but such relationship does not exist on
the Closing Date.
"Fosbrasil" shall mean Fosbrasil S.A., a
---------
corporation (sociedade por acoes) incorporated under the laws of
Brazil.
"Fosbrasil Financial Statements" shall have the
------------------------------
meaning set forth in Section 2.3(c).
"Fosbrasil Supply Agreement" shall mean the supply
--------------------------
agreement between Fosbrasil and Astaris Brasil.
"FTC" shall have the meaning set forth in Section
---
7.3(a).
"Full Allocation" shall have the meaning set forth
---------------
in Section 10.10(d)(x).
▇▇▇
"▇▇▇▇" ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ generally accepted
----
accounting principles, consistently applied during the periods
involved.
"General Escrow Account" shall have the meaning
----------------------
set forth in Section 1.2(b)(ii).
"General Escrow Amount" shall have the meaning set
---------------------
forth in Section 1.2(b)(ii).
"Governmental Authority" shall have the meaning
----------------------
set forth in Section 2.4.
"Governmental Order" shall have the meaning set
------------------
forth in Section 5.6.
"Hazardous Materials" means all materials,
-------------------
substances or wastes defined or regulated as "hazardous substances,"
"hazardous materials," "toxic substances," "hazardous wastes,"
"pollutants," "contaminants" or any other term of similar meaning and
effect under any Environmental Law, including petroleum (including
crude oil or any fraction thereof), asbestos, and polychlorinated
biphenyls.
"Historical Interim Financial Statements" shall
---------------------------------------
have the meaning set forth in Section 2.3(a).
"HSR Act" shall have the meaning set forth in
-------
Section 2.4.
"ICL" shall have the meaning set forth in the
---
preamble to this Agreement.
"Inactive Employees" shall have the meaning set
------------------
forth in Section 7.5(b)(i).
"Indemnified Party" shall have the meaning set
-----------------
forth in Section 9.1(e).
"Indemnifying Party" shall have the meaning set
------------------
forth in Section 9.1(e).
"Indemnity Claim" shall have the meaning set forth
---------------
in Section 9.1(c)(i).
"Initial Purchase Price" shall have the meaning
----------------------
set forth in Section 1.2(a).
"Initial Relief Order" means that certain order of
--------------------
the Bankruptcy Court, entered on July 21, 2005 attached hereto as
Exhibit I.
---------
"Intellectual Property" shall mean all (i) issued
---------------------
patents and pending patent applications (including any extensions,
revisions, continuations, continuations-in-part, divisionals,
reexaminations or reissues or equivalent or counterpart thereof); (ii)
inventions, discoveries, technology, processes, formulae, designs,
models, industrial designs, know-how, confidential information,
proprietary information and trade secrets, whether or not patented or
patentable; (iii) trademarks, service marks, trade names, brand names,
trade dress, slogans, logos and Internet domain names; (iv) copyrights
and other copyrightable works and copyrightable works in progress,
data, databases and software; and (v) all registrations and
applications for registration of any of the foregoing.
101
"Intercompany Payables" shall have the meaning set
---------------------
forth in Section 1.1(c)(xiv).
"Interim Balance Sheet" shall have the meaning set
---------------------
forth in Section 2.3(b).
"Interim Balance Sheet Date" shall have the
--------------------------
meaning set forth in Section 2.3(b).
"Inventory" shall have the meaning set forth in
---------
the definition of Acquired Assets.
"ISRA" shall have the meaning set forth in Section
----
7.11.
"ISRA Approval" shall have the meaning set forth
-------------
in Section 7.11.
"Israeli Bank Holiday" shall have the meaning set
--------------------
forth in the definition of Business Day.
"Joint Venture Agreement" shall mean that certain
-----------------------
Joint Venture Agreement, dated April 29, 1999, by and between Solutia
and FMC, as amended from time to time.
"Knowledge of the Seller", "Seller has Knowledge"
----------------------- --------------------
and any other similar knowledge qualification in the Agreement with
respect to the Seller shall mean the knowledge of the Seller and the
Subsidiaries (meaning the actual knowledge of the individuals listed
under the caption for Astaris in Section 10.10(a)(6) of the Disclosure
Schedule after reasonable inquiry), the knowledge of FMC (meaning the
actual knowledge of the individuals listed under the caption for FMC in
Section 10.10(a)(6) of the Disclosure Schedule after reasonable
inquiry) and the knowledge of Solutia (meaning the actual knowledge of
the individuals listed under the caption for Solutia in Section
10.10(a)(6) of the Disclosure Schedule after reasonable inquiry).
"Law" shall have the meaning set forth in Section 2.4.
---
"Leased Real Property" shall have the meaning set
--------------------
forth in Section 2.16(a).
"Leases" shall have the meaning set forth in
------
Section 2.16(a).
"Letter" shall have the meaning set forth in
------
Section 7.17.
"Liability" means any liability (whether foreseen
---------
or unforeseen, whether known or unknown, whether asserted or
unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to
become due).
"Lockbox Account" shall have the meaning set forth
---------------
in Section 7.17.
"Losses" shall have the meaning set forth in
------
Section 9.1(a)(i).
102
"Management" shall have the meaning set forth in
----------
Section 2.14(e).
"Material Adverse Effect" shall mean any
-----------------------
circumstance or event which, individually or in the aggregate with any
other circumstance or event is or is reasonably likely to be material
and adverse to (i) the possession, use occupancy or operation of the
Business, assets, properties, business, financial condition, results of
operations or liabilities of the Business, the Acquired Assets or the
Assumed Liabilities or (ii) the ability of the Seller or the Owners to
perform their respective obligations or to consummate the transactions
contemplated by this Agreement, except that a "Material Adverse Effect"
does not include any effect caused by (A) any change in general
economic conditions affecting generally the United States or Brazil,
the global economy or the capital or financial markets, except to the
extent such conditions impact the Business, the Acquired Assets or the
Assumed Liabilities in a materially disproportionate fashion, (B)
general economic conditions in the industries in which the Seller, the
Subsidiaries and Fosbrasil and their customers and suppliers conduct
business, except to the extent such conditions impact the Business, the
Acquired Assets or the Assumed Liabilities, or the customers and
suppliers of the Business, as the case may be, in a materially
disproportionate fashion, (C) changes in GAAP or in the authoritative
interpretations thereof, (D) the execution and delivery of this
Agreement, the announcement thereof or of the identity of the Buyer, or
the consummation of the transactions contemplated by this Agreement or
(E) the taking of any action specifically required or contemplated by
this Agreement or any of the Transaction Documents (and in conformance
therewith).
"Material Contracts" shall have the meaning set
------------------
forth in Section 2.13(a).
"Maximum Disputed Amount" shall have the meaning
-----------------------
set forth in Section 1.4(d).
"Minimum Claim Amount" shall have the meaning set
--------------------
forth in Section 9.1(a)(ii).
"Monsanto Basket" shall have the meaning set forth
---------------
in Section 1.1(b)(xii).
"Monsanto Costs Statement" shall have the meaning
------------------------
set forth in Section 7.24(a).
"Monsanto Disputed Items" shall have the meaning
-----------------------
set forth in Section 7.24(a).
"Monsanto Operating Agreement" shall mean the
----------------------------
Master Operating Agreement, dated as of September 1, 1997, by and
between Monsanto Company and Solutia Inc. (as assigned to Astaris on
April 1, 2000).
"Monsanto Resolution Period" shall have the
--------------------------
meaning set forth in Section 7.24(a).
103
"Monsanto Supply Agreement" shall mean the Supply
-------------------------
Agreement, by and between Solutia, P4 Production LLC and Pharmacia
Corporation, dated as of May 31, 2000 (as assigned to Astaris on May
31, 2000), as the same may be amended, supplemented or otherwise
modified from time to time.
"Monsanto Supply Agreement Environmental Costs"
---------------------------------------------
shall have the meaning set forth in the definition of Additional
Monsanto Supply Agreement Environmental Costs.
"Monsanto Verification Information" shall have the
---------------------------------
meaning set forth in Section 7.24(a).
"Multiemployer Plan" shall have the meaning set
------------------
forth in Section 2.10(d).
"Negotiation Actions" shall have the meaning set
-------------------
forth in Section 7.13.
"Net Working Capital" shall mean the amount
-------------------
calculated as of the Effective Time in accordance with GAAP and Section
1.4 hereof applied on a basis consistent with past practice and the
methods used in preparing the 2004 Balance Sheet equal to (i) the
following current assets of the Business included in the Acquired
Assets: (A) accounts receivable net of an aggregate allowance for
doubtful accounts, (B) other receivables, net of any reserves, (C)
inventories valued at the lower of standard cost or market (or as
otherwise provided consistent with Section 2.18(a) of the Disclosure
Schedule), with the cost being determined on a first-in, first-out
basis, net of reserves (including for excess, obsolete and slow moving
inventory), (D) due from affiliates, but only to the extent related to
sales of products and warehousing services provided by Seller to Owners
in the ordinary course of business, net of any reserves, (E) prepaid
expenses and other current assets and (F) cash in Astaris Brasil,
Astaris Canada and Astaris Europe, minus (ii) the following current
-----
liabilities of the Business that have been incurred in the ordinary
course of business consistent with past practice: (A) trade accounts
payable and bank overdrafts, (B) accrued compensation and benefits in
respect of Transferred Employees (including the fully vested amount of
compensation due in respect of the 2003-5 Astaris Long-Term Incentive
Program, effective as of January 1, 2003, and the 2005 Astaris
Management Incentive Program, effective as of January 1, 2005, upon the
occurrence of the Closing), (C) other accrued liabilities, (D) taxes
payable (which does not include any deferred taxes) and (E) due to
affiliates, but only to the extent related to purchases of soda ash
from FMC, adipic acid from Solutia, and purified phosphoric acid from
Fosbrasil, and to sales support services provided by FMC in the Far
East and provided by Solutia Singapore Pte. Ltd. in Singapore.
"Net Working Capital Statement" shall have the
-----------------------------
meaning set forth in Section 1.4(b).
"Neutral Arbitrator" shall have the meaning set
------------------
forth in Section 1.4(c)(ii).
"Non-Assumed Undisclosed Material Contract" shall
-----------------------------------------
mean any Material Contract that is required to be disclosed but is not
disclosed in Section 2.13 of the Disclosure Schedule; provided that the
--------
Buyer notifies the Seller within sixty (60) days
104
after the Closing Date that the Buyer elects, in its sole discretion,
that such Material Contract shall not be included within the Acquired
Assets.
"Non-Union Employee" shall mean all individuals
------------------
with whom the Seller maintains on the specified date, an
employer-employee relationship whose primary responsibilities relate to
the Business and who are not covered by any Assumed CBA.
"Non-Union Inactive Employee" shall have the
---------------------------
meaning set forth in Section 7.5(a)(i).
"Non-Union Transferred Employee" shall have the
------------------------------
meaning set forth in Section 7.5(a)(i).
"Non-U.S. Employee" shall mean all individuals
-----------------
with whom Astaris Brasil, Astaris Europe, Astaris Canada or Astaris
International maintain on the specified date, an employer-employee
relationship.
"Old Monsanto" means the entity now known as
------------
Pharmacia Corporation, which is a wholly owned subsidiary of Pfizer
Inc., and which was known as Monsanto Company prior to September 1,
1997.
"OPEB Obligations" means other post-employment
----------------
welfare benefit obligations of any Seller Person to any past, current
or future employees or retirees of such Seller Person including any
past, current or future retirees of either Owner's phosphorus chemicals
business or any predecessor thereof.
"Outside Date" shall have the meaning set forth in
------------
Section 8.1(b).
"Outstanding Guarantees" shall mean the Letter of
----------------------
Credit (No. ▇▇▇▇▇▇▇) issued by Bank of America with National Union Fire
as beneficiary.
"Owned Real Property" shall have the meaning set
-------------------
forth in Section 2.16(b).
"Owners" shall have the meaning set forth in the
------
preamble to this Agreement.
"Owners Indemnified Persons" shall have the
--------------------------
meaning set forth in Section 9.1(b)(i).
"Permits" shall mean all franchises, approvals,
-------
Consents, permits, authorizations, licenses, orders, registrations,
certificates, variances, and other similar permits or rights obtained
from any Governmental Authority.
"Permitted Encumbrances" shall have the meaning
----------------------
set forth in Section 2.7(a).
105
"Person" shall mean any individual, partnership,
------
firm, corporation, association, trust, unincorporated organization,
joint venture, limited liability company, governmental or regulatory
authority or other entity.
"Phosphate Salts" shall mean phosphate salts,
---------------
including sodium, potassium, magnesium, calcium, aluminum and ammonium
phosphates.
"Phosphorus Chemicals" shall mean phosphorus,
--------------------
phosphorus derivatives (including phosphorus pentasulfide), phosphoric
acids, phosphate salts and blends or mixtures of said phosphate salts
(including aluminum, ammonium, calcium, magnesium, potassium, sodium
salts and blends or mixtures thereof) and the products listed in
Section 10.10(a)(7) of the Disclosure Schedule, which is a list of
items that are being sold or held for sale by the Seller or any of the
Subsidiaries as of the date hereof. Notwithstanding the foregoing,
specifically excluded from the definition of Phosphorus Chemicals are:
(1) phosphorus trichloride and phosphorus oxychloride; (2) phosphate
esters; (3) any phosphonate product (including those sold by Solutia
under the Dequest(R) trademark); (4) any product for use in the
aviation hydraulic fluids or aviation solvents businesses (including
those sold by Solutia under the Skydrol(R) and Skykleen(R) trademarks);
(5) organic, phosphorus-containing fire retardants or
organic-phosphorus-containing water additives; (6) any products
developed, being developed, produced, marketed, manufactured, sold or
distributed by or on behalf of the other businesses of either Owner as
of the date hereof that may consume, use, contain, depend upon, or
otherwise incorporate any Phosphorus Chemicals and (7) sodium
tripolyphosphate and tetrasodium pyrophosphate, in each case only if it
is not of a degree of purity greater than technical grade (based on
standards prevailing on the date hereof).
"Potential Acquiror" shall have the meaning set
------------------
forth in Section 7.13.
"PPA Litigation" shall mean (i) any facts,
--------------
circumstances, Claims, transactions, events, occurrences, acts,
disclosures, statements, representations, omissions or failures to act,
or matters of any kind or nature whatsoever, related directly or
indirectly to, or facts or Claims for relief that could be alleged or
litigated in connection with, the alleged failure of or the alleged
failure to contribute the PPA Technology to the Seller and/or its
subsidiaries (including Astaris Production LLC) and (ii) any benefits,
recoveries, awards, damages, settlements or judgments with respect to
any item listed in clause (i) above. For purposes of this definition,
"Claims" shall mean any and all claims, causes of action, damages,
------
losses, liabilities, obligations, expenses, debts, dues, sums of money,
accounts, reckonings, contracts, controversies, agreements, promises
and demands of any and every character, kind and nature whatsoever,
whether known or unknown, fixed or contingent, direct or indirect,
accrued or not accrued, liquidated or unliquidated or suspected or
unsuspected, in contract or in tort or otherwise, and regardless of the
legal, contractual or equitable basis thereof, including but not
limited to any such claims, causes of action, damages, losses,
liabilities, expenses, debts, dues, sums of money, accounts,
reckonings, contracts, controversies, agreements, promises and demands
based upon negligence, usury, misrepresentation, conspiracy,
unconscionability, duress, economic duress, defamation, control,
interference with contractual or business relationships, conflicts of
interest, misuse of insider information,
106
concealment, disclosure, secrecy, wrongful setoff, violations of
statutes and regulations of governmental entities, instrumentalities
and agencies, racketeering activities, securities or antitrust laws
violations, tying arrangements, deceptive trade practices, breach or
abuse of any alleged fiduciary duty, breach or abuse of any alleged
duty of care or loyalty, breach of any alleged special relationship,
course of conduct or dealing, alleged obligation of fair dealing,
alleged obligation of good faith, alleged obligation of good faith and
fair dealing, failure to provide notice of, or request consent to, any
matter or action whether or not in connection with or related to an
agreement, or any doctrine of piercing the corporate veil, alter ego,
mere instrumentality or agency.
"PPA Restriction" shall have the meaning set forth
---------------
in Section 2.12(f).
"PPA Technology" shall mean all patents, patent
--------------
applications, trademarks, trademark applications, service marks and
service ▇▇▇▇ applications (except for those marks that incorporate the
names of FMC, the Seller or Foret, which such marks, but not the
incorporated names, are licensed as of the date hereof to the Seller
and/or any of its Affiliates or Subsidiaries), any copyrights,
copyright applications, trade secrets, technology, know-how,
engineering drawings and plans, and all rights related to the
foregoing, including all improvements and upgrades developed, practiced
or discovered in the future by FMC, Foret or Astaris Production LLC or
any of their respective Affiliates or any of their respective
subsidiaries or assignees, whether owned or leased by, or licensed to,
or under the control of, FMC, Foret or Astaris Production LLC or any of
their respective Affiliates or any of their respective subsidiaries or
assignees, that are used or potentially useful solely in connection
with in the manufacture, use or sale of any grade or type of purified
phosphoric acid, together with all related know-how and all related
rights, whether owned by, or licensed to, Astaris Production LLC or any
of its Affiliates or any of their respective subsidiaries or assignees
or to which Astaris Production LLC or any of its Affiliates or any of
their respective subsidiaries or assignees has rights, that pertain
solely to the making of technical and/or food grade wet processed
purified phosphoric acid, including the following patents (along with
any corresponding patents or patent applications, trademarks or
trademark applications, service marks or service ▇▇▇▇ applications,
copyrights and copyright applications, in any other countries):
(i) Titled in FMC, Astaris Production LLC or any
of their respective Affiliates or subsidiaries or assignees:
FMC Dkt. No. US Patent No.
------------ -------------
52315 4780295
52324 4804526
52331 5006319
(ii) Titled in Foret:
556470 - Spain
547626 - Spain
107
"Prayon Agreement" means that certain asset
----------------
purchase agreement, dated as of December 8, 1999, by and between
Astaris and Societe Chimique Prayon-▇▇▇▇▇ ▇.▇.
"Proceedings" shall have the meaning set forth in
-----------
Section 2.6.
"Purchase Price" shall have the meaning set forth
--------------
in Section 1.2(a).
"Real Property" shall have the meaning set forth
-------------
in the definition of Acquired Assets.
"Related Owner Obligation" shall have the meaning
------------------------
set forth in Section 10.10(d)(ix).
"Release" shall mean the release, spill, leak,
-------
discharge, disposal, pumping, pouring, emission, emptying, injection,
leaching, dumping or allowing to escape of Hazardous Materials.
"Representative" shall have the meaning set forth
--------------
in Section 7.13.
"Resolution Period" shall have the meaning set
-----------------
forth in Section 1.4(c)(i).
"Retained Astaris Liabilities" shall have the
----------------------------
meaning set forth in Section 10.10(d)(viii).
"Retained Environmental Liabilities" shall mean,
----------------------------------
regardless of whether any of the following are contained in any section
of the Disclosure Schedule to this Agreement or otherwise disclosed to
the Buyer on or prior to the Closing Date, any and all Liability
asserted against or reasonably incurred by any Seller Person, any
Affiliate of the Seller, the Buyer, or any Affiliate of the Buyer
arising out of or related to: (i) environmental conditions constituting
the Release, threat of Release, or exposure to Hazardous Materials
first occurring on or prior to the Closing Date at, on, in, from,
about, under or migrating to any Real Property or any property now or
previously owned, operated or leased by a Seller Person in connection
with the Business or the Acquired Assets, whether into the air, soil,
ground or surface waters on-site or off-site, except to the extent but
only to the extent the Liabilities arise from Exacerbation by the Buyer
which constitutes a Buyer Environmental Liability; or (ii) the off-site
storage, treatment, recycling, Release during transportation, disposal
or arrangement for disposal prior to the Closing Date of Hazardous
Materials Managed or Released by or on behalf of a Seller Person with
respect to the Business or the Acquired Assets; or (iii) any violation
of any Environmental Laws by a Seller Person in connection with the
Business or the Acquired Assets first occurring prior to the Closing
Date (including costs and expenses for pollution control or monitoring
equipment and operating and maintenance required to bring the Business
or Acquired Assets into compliance with Environmental Laws and fines,
penalties and defense costs), except to the extent but only to the
extent the Liabilities arise from Exacerbation by the Buyer which
constitutes a Buyer Environmental Liability; or (iv) any environmental
condition or violation of Environmental Law disclosed in Section 2.14
of the Disclosure Schedule (and marked with an asterisk (*)) or any
matter disclosed in the Retained Environmental Liability
108
Schedule, except to the extent but only to the extent the Liabilities
arise from Exacerbation by the Buyer which constitutes a Buyer
Environmental Liability; or (v) the Industrial Site Recovery Act
proceeding at the Carteret, New Jersey facility, except to the extent
but only to the extent a Loss subject to FMC's or the Seller's ISRA
Proceeding constitutes a Buyer Environmental Liability; or (vi) any
environmental condition or violation of Environmental Law related to
the ownership or operation of the Excluded Assets; or (vii) any
Exacerbation by any Seller Person of a Buyer Environmental Liability.
The provision of services and standard of liability for such services
performed pursuant to the Transition Services Agreement shall be as set
forth in the Transition Services Agreement.
"Retained Environmental Liability Schedule" shall
-----------------------------------------
mean Section 10.10(a)(10) of the Disclosure Schedule, together with the
exhibits and schedules attached to it, being delivered simultaneously
with the execution of this Agreement and forming a part of this
Agreement.
"Retained FMC Liabilities" shall have the meaning
------------------------
set forth in Section 10.10(d)(viii).
"Retained Liabilities" shall have the meaning set
--------------------
forth in Section 1.1(c).
"Retained Solutia Liabilities" shall have the
----------------------------
meaning set forth in Section 10.10(d)(viii).
"Seller" shall have the meaning set forth in the
------
preamble to this Agreement.
"Seller Account Parties" shall have the meaning
----------------------
set forth in Section 7.17.
"Seller Breach" shall have the meaning set forth
-------------
in Section 8.1(f).
"Seller Intellectual Property" shall have the
----------------------------
meaning set forth in Section 2.12(c).
"Seller Permits" shall have the meaning set forth
--------------
in Section 2.5.
"Seller Person" shall mean each of the Owners, the
-------------
Seller, each of the Subsidiaries, and each of the respective Affiliates
and predecessors of such Persons.
"Solutia" shall have the meaning set forth in the
-------
preamble to this Agreement.
"Solutia Asset Transfer Agreement" means the Asset
--------------------------------
Transfer Agreement dated as of April 1, 2000, by and between Astaris
and Solutia.
"Solutia Contributed Facilities" shall mean the
------------------------------
facilities set forth on Section 10.10(a)(5) of the Disclosure Schedule.
109
"Solutia DIP Financing Agreement" means the
-------------------------------
Financing Agreement, dated as of January 16, 2004, by and among Solutia
and Solutia Business Enterprises, Inc., as Debtors-In-Possession, as
borrowers, certain subsidiaries of Solutia, as guarantors, the Lenders
named therein, and Citicorp USA, Inc, as collateral, administrative and
documentation agent, as amended.
"Solvent" shall have the meaning set forth in
-------
Section 2.22.
"Subsidiaries" shall have the meaning set forth in
------------
Section 2.1(a).
"subsidiary" shall mean with respect to any
----------
Person, any corporation, limited liability company, partnership,
association, or other business entity of which (i) if a corporation, a
majority of the total voting power of shares of stock entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers, or trustees thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of
the other subsidiaries of that Person or a combination thereof or (ii)
if a limited liability company, partnership, association, or other
business entity (other than a corporation), a majority of partnership
or other similar ownership interests thereof having the power to govern
or elect members of the applicable governing body of such entity is at
the time owned or Controlled, directly or indirectly, by that Person or
one or more subsidiaries of that Person or a combination thereof; and
the term "subsidiary" shall include all subsidiaries of such
subsidiary, or any Person, the operations of which are consolidated or
combined with such Person, pursuant to GAAP, for financial reporting
purposes.
"Surveys" shall have the meaning set forth in
-------
Section 7.20(a).
"Tax" or "Taxes" shall mean any taxes of any kind,
--- -----
including but not limited to those on or measured by or referred to as
income, gross receipts, capital, sales, use, ad valorem, franchise,
profits, license, withholding, payroll, employment, excise, severance,
stamp, occupation, premium, escheat, value added, property or windfall
profits taxes, customs duties or similar fees, assessments or charges
of any kind whatsoever, together with any interest and any penalties,
additions to tax or additional amounts imposed by any governmental
authority, domestic or foreign.
"Tax Benefit" shall have the meaning set forth in
-----------
Section 9.1(c)(i).
"Tax Return" shall mean any return, report or
----------
statement required to be filed with any governmental authority with
respect to Taxes, including any schedule or attachment thereto or
amendment thereof.
"Termination Fee" shall have the meaning set forth
---------------
in Section 8.2(b).
"Territory" shall have the meaning set forth in
---------
Section 7.9(a)(i).
"Third Party Claim" shall have the meaning set
-----------------
forth in Section 9.1(e).
"Title Company" shall have the meaning set forth
-------------
in Section 7.20(a).
110
"Title Insurance" shall have the meaning set forth
---------------
in Section 7.20(b).
"Transaction Documents" shall mean (i) with
---------------------
respect to the Acquired Assets, such instruments of sale, conveyance,
transfer and assignment, and such other agreements or documents, if
any, in each case in form and substance reasonably satisfactory to the
Seller, the Owners and the Buyer, as shall be necessary in order to
transfer all right, title and interest in the Acquired Assets in
accordance with the terms hereof, (ii) the Transition Services
Agreement, (iii) the Carteret Agreement, (iv) the Sauget Supply
Agreement and (v) such other documents, agreements and instruments
required to be delivered pursuant to this Agreement.
"Transferred Employees" shall mean all Non-Union
---------------------
Transferred Employees and Union Transferred Employees, collectively.
"Transfer Taxes" shall have the meaning set forth
--------------
in Section 7.4(b).
"Transition Services Agreement" shall mean the
-----------------------------
Services Agreement, substantially in the form attached as Exhibit D
---------
hereto.
"Treasury Regulations" shall mean the Treasury
--------------------
Regulations promulgated under the Code.
"Union Employee" shall mean all individuals with
--------------
whom the Seller or the Subsidiaries maintain on the specified date, an
employer-employee relationship and who are covered by an Assumed CBA.
"Union Inactive Employees" shall have the meaning
------------------------
set forth in Section 7.5(b)(i).
"Union Transferred Employees" shall have the
---------------------------
meaning set forth in Section 7.5(b)(i).
"Unknown Environmental Liabilities" shall mean any
---------------------------------
and all Liabilities arising out of or related to subsections (i) or
(iii) of the Retained Environmental Liabilities definition, first
occurring at the Real Property prior to the Closing Date where such
environmental condition or violation of Environmental Law (i) was not
disclosed in (A) any item marked with an asterisk (*) on Section 2.14
of the Disclosure Schedule or (B) the Retained Environmental Liability
Schedule; and (ii) was not otherwise within the Knowledge of the Seller
prior to the Closing Date (provided, however, to the extent that the
applicable Seller, Subsidiary or Owner lacked actual knowledge of such
environmental condition or violation of Environmental Law by reason of
its failure to have made reasonable inquiry during its ownership or
operation of the Business or the Acquired Assets prior to Closing, the
Liability is not an Unknown Environmental Liability).
"Verification Information" shall have the meaning
------------------------
set forth in Section 7.24(a).
▇▇▇
"▇▇▇▇ ▇▇▇" shall have the meaning set forth in
--------
Section 2.11.
"Working Capital and Capex Escrow Account" shall
----------------------------------------
have the meaning set forth in Section 1.2(b)(i).
"Working Capital Escrow Amount" shall mean an
-----------------------------
amount determined as follows:
(i) in the event that there is any Estimated Net
Working Capital Deficiency Amount, an amount equal to ten million
dollars ($10,000,000);
(ii) in the event that there is any Estimated Net
Working Capital Excess Amount, an amount equal to the greater of
ten million dollars ($10,000,000) and such Estimated Net Working
Capital Excess Amount; or
(iii) in any other event, an amount equal to ten
million dollars ($10,000,000).
(b) Interpretive Rules. The words "hereof," "herein"
------------------
and "hereunder" and words of similar import when used in this Agreement
refer to this Agreement as a whole (including any Schedules and Exhibits
hereto) and not to any particular provision of this Agreement, and all
Article, Section, Schedule and Exhibit references are to this Agreement
unless otherwise specified. The words "include," "includes" and "including"
will be deemed to be followed by the phrase "without limitation." The word
"if" means "if and only if." The meanings given to terms defined herein will
be equally applicable to both the singular and plural forms of such terms.
Whenever the context may require, any pronoun includes the corresponding
masculine, feminine and neuter forms. Except as otherwise expressly provided
herein, all references to "dollars" or "$" will be deemed references to the
lawful money of the United States of America. For purposes of this
Agreement, each representation, warranty and covenant shall be analyzed
independently of any other representation, warranty or covenant in order to
determine whether there has been a breach of any such representation,
warranty or covenant, and the existence of or payment under the Purchase
Price adjustment set forth in Section 1.4 shall not limit any Person's right
to indemnification hereunder, subject to Section 9.1(c)(iv).
(c) Rules of Construction. The parties hereto agree that they
---------------------
have been represented by counsel during the negotiation and execution of
this Agreement and, therefore, waive the application of any law, regulation,
holding or rule of construction providing that ambiguities in an agreement
or other document will be construed against the party drafting such
agreement or document. In the event of a conflict or inconsistency between
the terms of this Agreement and the terms of any other documents delivered
in connection with the consummation of the transactions contemplated by this
Agreement, the parties acknowledge and agree that the terms of this
Agreement shall supersede such conflicting or inconsistent terms in such
other documents and the terms of this Agreement shall define the rights and
obligations of the parties and their respective officers, directors,
employees, stockholders and Affiliates with respect to the subject matter of
such conflict or inconsistency.
(d) Distinct Owners. Notwithstanding anything to the contrary
---------------
herein:
112
(i) a reference herein to a covenant, obligation
or agreement of an Owner (including obligations to indemnify, but not
including any obligation or agreement of the Owners to cause the Seller
to take any action) shall be deemed to be a several but not joint
covenant, obligation or agreement, as appropriate, of such Owner, for
which such Owner shall be 100% responsible and for which the other
Owner shall not have liability, directly or indirectly, to any Buyer
Indemnified Person for the liability or non-compliance of the first
Owner;
(ii) with respect to a reference herein to a
covenant, obligation or agreement of the Seller (or of the Owners to
agree to cause the Seller to take any action), each Owner shall have
liability to any Buyer Indemnified Person for fifty percent (50%) of
the Loss with respect to any non-compliance with such covenant,
obligation or agreement of the Seller and neither Owner shall have
liability, directly or indirectly, to any Buyer Indemnified Person for
the liability or non-compliance of the other Owner;
(iii) responsibility for the representations and
warranties of the Seller or either Owner hereunder is as follows:
(A) if the representation and warranty
is made by an Owner, such Owner shall have one hundred percent
(100%) of the responsibility, and the other Owner shall not have
liability, directly or indirectly, to any Buyer Indemnified Person
for the Loss with respect to any breach of such representation and
warranty and neither Owner shall have liability, directly or
indirectly, to any Buyer Indemnified Person for the liability or
non-compliance of the other Owner (it being understood that any
representation and warranty made with respect to Foret shall be
deemed to have been made solely by FMC);
(B) if the representation and warranty
is made by the Owners jointly, and not separately by an Owner,
each Owner shall have liability to any Buyer Indemnified Person
for fifty percent (50%) of the Loss with respect to any breach of
such representation and warranty and neither Owner shall have
liability, directly or indirectly, to any Buyer Indemnified Person
for the other Owner's non-compliance or liability for fifty
percent (50%) of the Loss;
(C) notwithstanding anything to the
contrary set forth in subclause (D) below, if the representation
and warranty is made by the Seller or an Owner with respect to
either a Solutia Contributed Facility or a FMC Contributed
Facility, Solutia or FMC, as the case may be, shall have 100% of
the responsibility, and the Seller and the other Owner shall not
have liability, directly or indirectly, to any Buyer Indemnified
Person for any breach of such representation and warranty or the
non-compliance of the first Owner; or
113
(D) except as otherwise provided in
clause (C) above, if the representation and warranty is made by
the Seller, each Owner shall have liability to any Buyer
Indemnified Person for fifty percent (50%) of the Loss with
respect to any breach of such representation and warranty and
neither Owner shall have liability, directly or indirectly, to any
Buyer Indemnified Person for the other Owner's non-compliance or
liability for fifty percent (50%) of the Loss with respect to any
breach by the Seller of such representation and warranty;
provided, however, that notwithstanding anything to the contrary
-------- -------
set forth in this clause (D), if (x) a representation or warranty
contemplated by such clause includes a qualification as to the
Knowledge of the Seller or other phrases of similar import and (y)
a breach of such representation and warranty arises because of the
existence of such Knowledge of the Seller that is attributable
only to one of the Owners (but not both and not Seller), the Owner
with such knowledge shall have one hundred percent (100%) of the
responsibility, and the other Owner shall not have liability,
directly or indirectly, to any Buyer Indemnified Party with
respect to any such breach;
(iv) actions to be taken (or omissions to take
action) by the Owners with respect to matters contemplated hereby mean
actions to be taken by (or omissions to take action by) each Owner, for
which such Owner shall be fully responsible, and neither Owner shall be
liable, directly or indirectly, to any Buyer Indemnified Person for any
such actions or omissions by the other Owner;
(v) deliverables required of the Owners hereby
shall be deemed to be deliverables required of each Owner, as
applicable, for which such Owner shall be fully responsible, and
neither Owner shall be liable, directly or indirectly, to any Buyer
Indemnified Person for any failure of the other Owner to so deliver;
(vi) a notice given by one Owner hereby shall not
be deemed thereby to be made by the other Owner, and a notice made to
one Owner shall not be deemed to be a notice made to the other Owner;
(vii) any other plural reference to the Owners
shall be deemed to be a reference to each Owner individually unless the
context clearly indicates otherwise;
(viii) To the extent any Retained Liabilities are
attributable to (A) the assets, properties or rights contributed by FMC
to Astaris or any of its subsidiaries (the "Retained FMC Liabilities"),
------------------------
including those assets, properties or rights set forth on Section
10.10(a)(8) of the Disclosure Schedule, such Retained Liabilities shall
be retained or assumed (as applicable) by FMC and (B) the assets,
properties or rights contributed by Solutia to Astaris or any of its
subsidiaries (the "Retained Solutia Liabilities"), including those
----------------------------
assets, properties or rights set forth on Section 10.10(a)(9) of the
Disclosure Schedule, such Retained Liabilities shall be retained or
assumed (as applicable) by Solutia. Any Retained Liability that is not
a Retained FMC Liability or a Retained Solutia
114
Liability shall be retained or assumed (as applicable) by Astaris (the
"Retained Astaris Liabilities"). FMC shall be responsible for 100% of
----------------------------
any Retained FMC Liabilities and 50% of any Retained Astaris
Liabilities and Solutia shall be responsible for 100% of any Retained
Solutia Liabilities and 50% of any Retained Astaris Liabilities; it
being understood that neither FMC or Solutia shall have any liability,
directly or indirectly, to any Buyer Indemnified Person for the
liability or non-compliance of the other.
(ix) The obligations of the Owners in this
Agreement and the other Transaction Documents are several and not
joint. A several obligation of an Owner shall be independent of the
several obligation of the other Owner as to the same subject matter (a
"Related Owner Obligation") and shall not be contingent upon the
------------------------
enforcement or fulfillment of the Related Owner Obligation. None of the
Buyer, its Affiliates or any Buyer Indemnified Person shall have any
obligation to pursue or enforce any Related Owner Obligation under this
Agreement or any of the other Transaction Documents equally and ratably
between or among the Owners.
(x) The parties hereto understand and acknowledge
that the provisions of this Section 10.10(d) are intended solely to
allocate responsibility for the obligations of the Owners to the Buyer
Indemnified Persons under this Agreement and the Transaction Documents,
and that the foregoing allocation shall always ensure that each Buyer
Indemnified Person is entitled to recover, singly from an Owner or
cumulatively from the Owners, one hundred percent (100%) responsibility
for each claim or Loss for which such Buyer Indemnified Person is
otherwise entitled to recover hereunder ("Full Allocation"). If as a
---------------
result of any indemnification or other claim by any Buyer
Indemnified Person, either Owner contests the claim because
responsibility for such claim rests in whole or part with the other
Owner under the terms hereof (as opposed to whether the claim has
substantive merit), and such other Owner does not accept responsibility
for such claim sufficient to accomplish Full Allocation, then each
Owner shall be responsible for fifty percent (50%) of such claim or
Loss in the absence of a final, nonappealable court order establishing
Full Allocation otherwise.
(xi) Nothing set forth in this Section 10.10(d)
shall limit or otherwise affect the Buyer's right to seek performance
or other equitable relief from the applicable party (as designated
herein) pursuant to Section 10.17 hereof.
10.11 Disclosure Schedule.
-------------------
(a) The Disclosure Schedule is delivered in connection with
the execution and delivery of this Agreement. All capitalized terms not
defined in the Disclosure Schedule shall have the meanings ascribed to them
in this Agreement. Subject to the immediately following sentence, the
representations and warranties of the Seller and the Owners and the Buyer
and ICL in this Agreement are made and given subject to the disclosures in
the Disclosure Schedule. Regardless of the existence or absence of
cross-references, the disclosure of any matter in the Disclosure Schedule
shall be deemed to be a disclosure for purposes of the representations of
this
115
Agreement relating thereto to the extent that the relevance of such
disclosure is readily apparent from its text. The section headings in the
Disclosure Schedule are for convenience of reference only and shall not be
deemed to alter or affect the meaning or interpretation of any information
disclosed herein or any provision of this Agreement. The listing of any
matter shall expressly not be deemed to constitute an admission by any
party, or to otherwise imply, that any such matter is required to be
disclosed under this Agreement. In particular, (i) certain matters are
disclosed below that may not be required to be disclosed because of certain
minimum thresholds or materiality standards set forth in this Agreement;
(ii) the disclosure of any such matter does not mean that it meets or
surpasses any such minimum thresholds or materiality standards; and (iii) no
disclosure in the exhibits or schedules relating to any possible breach or
violation of any agreement, law or regulation shall be construed as an
admission or indication that any such breach or violation exists or has
actually occurred. In no event shall the listing of such matters in the
Disclosure Schedule be deemed or interpreted to expand the scope of any
party's representations and warranties contained in this Agreement. All
attachments to the Disclosure Schedule are incorporated by reference into
the Disclosure Schedule in which they are directly or indirectly referenced.
(b) Notwithstanding anything herein to the contrary, the
Buyer shall not assume any Liabilities, commitments or obligations
(contingent or absolute and whether or not determinable as of the Closing)
of any Seller Person except for the Assumed Liabilities as specifically and
expressly provided for in Section 1.1(b), and the listing of any matter in
the Disclosure Schedule shall not be deemed or interpreted to cause, or have
the effect of causing, such matter to become an Assumed Liability or the
Buyer to assume or become responsible for any Liability, commitment or
obligation related to such matter.
(c) Nothing in the Disclosure Schedule will be deemed
adequate to disclose an exception to a representation or warranty made in
this Agreement unless the applicable Disclosure Schedule identifies the
exception with reasonable particularity. Without limiting the generality of
the foregoing, the mere listing (or inclusion of a copy) of a document or
other item will not be deemed adequate to disclose an exception to a
representation or warranty made in this Agreement (unless the representation
or warranty has to do with the existence of the document or the contents
thereof or other item itself). The Seller and the Owners each acknowledge
and agree that, except with respect to representations set forth in Article
II and Article III that are qualified by the Knowledge of the Seller, the
fact that the Seller or the Owners did not have knowledge of matters which
result in Losses to the Buyer or ICL will not relieve the Seller or either
of the Owners of their obligation pursuant to Article IX to indemnify and
hold the Buyer, ICL or any other Buyer Indemnified Person harmless from all
Losses.
10.12 Headings; Table of Contents.
---------------------------
The headings and table of contents contained in this
Agreement are for reference only and shall not affect in any way the meaning
or interpretation of this Agreement.
10.13 Severability.
------------
In the event that any provision of this Agreement or the
application thereof becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable,
116
the remainder of this Agreement will continue in full force and effect so
long as the economic and legal substance of the transactions contemplated
hereby are not affected in any manner materially adverse to any party
hereto. The parties hereto further agree to replace such void or
unenforceable provision of this Agreement with a valid and enforceable
provision that will achieve, to the extent possible, the economic, business
and other purposes of such void or unenforceable provision.
10.14 No Third Party Beneficiaries.
----------------------------
Nothing herein expressed or implied is intended or shall be
construed to confer upon or give to any Person, other than the parties
hereto and their respective permitted successors or assigns, any legal,
equitable or other rights or remedies under or by reason of any provision of
this Agreement.
10.15 CONSENT TO JURISDICTION; APPOINTMENT OF AGENT FOR SERVICE OF
------------------------------------------------------------
PROCESS.
-------
THE PARTIES HERETO HEREBY CONSENT TO THE JURISDICTION OF ANY STATE
OR FEDERAL COURT LOCATED WITHIN THE AREA ENCOMPASSED BY THE SOUTHERN
DISTRICT OF THE STATE OF NEW YORK AND IRREVOCABLY AGREE THAT ALL ACTIONS OR
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE LITIGATED
IN SUCH COURTS TO THE EXTENT SUCH ACTIONS OR PROCEEDINGS ARE JUSTICIABLE IN
SUCH FORUM. THE PARTIES HERETO EACH ACCEPT FOR ITSELF AND IN CONNECTION WITH
ITS RESPECTIVE PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE EXCLUSIVE
JURISDICTION AND VENUE OF THE AFORESAID COURTS AND WAIVE ANY DEFENSE OF
FORUM NON CONVENIENS, AND IRREVOCABLY AGREE TO BE BOUND BY ANY NONAPPEALABLE
JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT. EACH PARTY
HEREBY DESIGNATES, APPOINTS AND EMPOWERS CT CORPORATION SYSTEM, WITH OFFICES
CURRENTLY AT ATTN: SERVICE OF PROCESS DEPARTMENT, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, AS ITS LAWFUL AGENT TO RECEIVE FOR AND ON
ITS BEHALF SERVICE OF PROCESS IN THE STATE OF NEW YORK IN ANY SUCH ACTION OR
PROCEEDING. EACH PARTY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS
OUTSIDE THE TERRITORIAL JURISDICTION OF SAID COURTS IN ANY SUCH ACTION OR
PROCEEDING BY MAILING COPIES THEREOF BY REGISTERED UNITED STATES MAIL,
POSTAGE PREPAID, TO ITS ADDRESS AS SPECIFIED IN OR PURSUANT TO SECTION 10.6.
THE PARTIES AGREE TO A WAIVER OF SERVICE UNDER RULE 4 OF THE FEDERAL RULES
OF CIVIL PROCEDURE.
10.16 WAIVER OF JURY TRIALS.
---------------------
TO THE FULLEST EXTENT PERMITTED BY LAW, THE PARTIES HERETO HEREBY
WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN
THEM RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION. THE PARTIES HERETO
ALSO WAIVE ANY BOND
117
OR SURETY OR SECURITY UPON SUCH BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE
REQUIRED OF ANY OF THE OTHER PARTIES. THE SCOPE OF THIS WAIVER IS INTENDED
TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY
COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON
LAW AND STATUTORY CLAIMS. THE PARTIES HERETO ACKNOWLEDGE THAT THIS WAIVER IS
A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS
ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH
WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. THE
PARTIES HERETO FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS
WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY
WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS
WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR
IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR TO ANY OTHER
DOCUMENTS OR AGREEMENTS RELATING TO THE TRANSACTIONS CONTEMPLATED HEREBY. IN
THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO
A TRIAL BY THE COURT.
10.17 Specific Enforcement; Cumulative Remedies.
-----------------------------------------
Each party acknowledges and agrees that, prior to Closing, the
other parties would be irreparably damaged if any of the provisions of this
Agreement are not performed in accordance with their specific terms and that
any breach of this Agreement by a party could not be adequately compensated
in all cases by monetary damages alone. Accordingly, in addition to any
other right or remedy to which any party may be entitled at law or in
equity, prior to Closing, a party shall be entitled to enforce any provision
of this Agreement by a decree of specific performance and to temporary,
preliminary and permanent injunctive relief to prevent breaches or
threatened breaches of any of the provisions of this Agreement, without
posting any bond or other undertaking. Except as otherwise provided herein,
any and all remedies herein expressly conferred upon a party will be deemed
cumulative with and not exclusive of any other remedy conferred hereby, or
by Law or equity upon such party, and the exercise by a party of any one
remedy will not preclude the exercise of any other remedy. In addition, any
party shall be entitled to obtain from the breaching party court costs and
reasonable attorneys' fees incurred by it in enforcing its rights hereunder.
10.18 Guarantee.
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ICL irrevocably, absolutely and unconditionally guarantees to the
Seller and the Owners, as and for its own liability and without any setoff
or requirement of presentment, the due, punctual and complete payment and
performance of each and all of the obligations and Liabilities of the Buyer
or any assignee under this Agreement and the other Transaction Documents, in
each case as and when the same shall become due and payable and/or
performable on the terms and subject to the conditions thereof. The Seller
and the Owners shall
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be entitled to enforce directly against ICL any of the foregoing obligations
and Liabilities, and ICL's obligations and Liabilities hereunder are in no
way conditioned or contingent upon any attempt to collect from or enforce
performance or compliance by the Buyer or upon any other event or condition
whatsoever. ICL shall have the benefit of the representations, warranties,
covenants and agreements of the Seller and the Owners contained in this
Agreement and the other Transaction Documents. All limitations and
conditions to the Buyer's obligations and liability hereunder shall also be
limitations and conditions to the obligations and liability of ICL
hereunder.
10.19 No Right of Setoff.
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No covenant, obligation, claim or liability of any party
under this Agreement or any Transaction Document, including any Retained
Liabilities, Assumed Liabilities, indemnification obligation or guarantee,
shall be subject to any right of setoff.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the undersigned have caused this Agreement to
be executed by its duly authorized officer, in each case as of the day and
year first above written.
FMC CORPORATION
By: /s/ D. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name: D. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
SOLUTIA INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior V-P & CFO
ASTARIS LLC
By: /s/ ▇▇▇▇ ▇▇▇▇▇
--------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: President & CEO
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ICL PERFORMANCE PRODUCTS HOLDING INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
ISRAEL CHEMICALS LIMITED
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Attorney-in-Fact
ISRAEL CHEMICALS LIMITED
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Attorney-in-Fact
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