**Exhibit 10.58**

 

**SHARE AND ASSET PURCHASE AGREEMENT**

 

**by and among**

 

**SK Atlas, LLC**

 

**SK Capital Partners II, LP**

 

**and**

 

**Chemtura Corporation**

 

 

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**December 23, 2009**

 

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**TABLE OF CONTENTS**

 
| ** **        | ** **                                             | **Page** |
|-------------------|--------------------------------------------------------|----------|
|              |                                                   |     |
| ARTICLE 1         | DEFINITIONS AND CONSTRUCTION                           | 1        |
| Section 1.1  | Definitions                                            | 1        |
| Section 1.2  | Additional Defined Terms                               | 9        |
| Section 1.3  | Construction                                           | 12       |
|              |                                                   |     |
| ARTICLE 2         | THE TRANSACTION                                        | 12       |
| Section 2.1  | Sale and Purchase of Shares and Purchased Assets       | 12       |
| Section 2.2  | Excluded Assets                                        | 13       |
| Section 2.3  | Assumed Liabilities                                    | 15       |
| Section 2.4  | Excluded Liabilities                                   | 16       |
| Section 2.5  | Consideration                                          | 17       |
| Section 2.6  | Post-Closing Adjustment Net Working Capital Adjustment | 18       |
| Section 2.7  | Allocation of Purchase Price                           | 20       |
| Section 2.8  | Closing                                                | 21       |
| Section 2.9  | Closing Deliveries                                     | 21       |
| Section 2.10 | Certain Foreign Purchased Assets                       | 23       |
|              |                                                   |     |
| ARTICLE 3         | REPRESENTATIONS AND WARRANTIES OF THE SELLER           | 24       |
| Section 3.1  | Organization and Good Standing                         | 24       |
| Section 3.2  | Authority and Enforceability                           | 24       |
| Section 3.3  | No Conflict                                            | 24       |
| Section 3.4  | Capitalization and Ownership                           | 25       |
| Section 3.5  | Financial Statements                                   | 25       |
| Section 3.6  | Operation of the Business                              | 26       |
| Section 3.7  | Absence of Certain Changes and Events                  | 26       |
| Section 3.8  | Personal Property                                      | 27       |
| Section 3.9  | Real Property                                          | 27       |
| Section 3.10 | Intellectual Property                                  | 28       |
| Section 3.11 | Contracts                                              | 29       |
| Section 3.12 | Tax Matters                                            | 30       |
| Section 3.13 | Employee Benefit Matters                               | 31       |
| Section 3.14 | Employment and Labor Matters                           | 31       |
| Section 3.15 | Environmental, Health and Safety Matters               | 32       |
| Section 3.16 | Governmental Authorizations                            | 33       |
|                   |                                                        |          |  |

 

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**TABLEOF CONTENTS**

(continued)

 
| ** **        | ** **                                         | **Page**   |
|-------------------|----------------------------------------------------|------------|
| ** **        | ** **                                         | ** ** |
| Section 3.17 | Compliance with Laws                               | 33         |
| Section 3.18 | Permits                                            | 34         |
| Section 3.19 | Legal Proceedings                                  | 34         |
| Section 3.20 | Insurance                                          | 34         |
| Section 3.21 | Brokers Fees                                       | 34         |
| Section 3.22 | REACH                                              | 34         |
| Section 3.23 | Disclaimer of Other Representations and Warranties | 34         |
|              |                                               |       |
| ARTICLE 4         | REPRESENTATIONS AND WARRANTIES OF THE PURCHASER    | 35         |
| Section 4.1  | Organization and Good Standing                     | 35         |
| Section 4.2  | Authority and Enforceability                       | 35         |
| Section 4.3  | No Conflict                                        | 35         |
| Section 4.4  | Legal Proceedings                                  | 36         |
| Section 4.5  | Investment Intent                                  | 36         |
| Section 4.6  | Brokers Fees                                       | 36         |
| Section 4.7  | Financial Capacity                                 | 36         |
| Section 4.8  | Independent Investigation                          | 36         |
|              |                                               |       |
| ARTICLE 5         | COVENANTS                                          | 37         |
| Section 5.1  | Access and Investigation                           | 37         |
| Section 5.2  | Operation of the Business                          | 37         |
| Section 5.3  | Bankruptcy Actions                                 | 39         |
| Section 5.4  | Exclusivity; No Solicitation of Transactions       | 39         |
| Section 5.5  | Consents and Filings                               | 40         |
| Section 5.6  | Supplements to Disclosure Schedules                | 41         |
| Section 5.7  | Assignment of Contracts; Cure of Defaults          | 41         |
| Section 5.8  | Financing                                          | 41         |
| Section 5.9  | Confidentiality                                    | 41         |
| Section 5.10 | Public Announcements                               | 42         |
| Section 5.11 | Further Actions                                    | 43         |
| Section 5.12 | Indemnification and Insurance                      | 43         |
| Section 5.13 | Bulk Transfer Laws                                 | 43         |
| Section 5.14 | Designated Affiliate                               | 43         |
| Section 5.15 | Use of Seller’s Name; Seller Marks            | 43         |
|                   |                                                    |            |  |

 

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**TABLEOF CONTENTS**

(continued)

 
| ** **        | ** **                                                                        | **Page**   |
|-------------------|-----------------------------------------------------------------------------------|------------|
| ** **        | ** **                                                                        | ** ** |
| Section 5.16 | Refunds and Remittances                                                           | 44         |
| Section 5.17 | Litigation Support                                                                | 44         |
| Section 5.18 | Intercompany Accounts                                                             | 45         |
| Section 5.19 | Assistance with Preparation of Financial Statements                               | 45         |
| Section 5.20 | Trade  Accounts Payable, Shared Accounts Payable and Accrued Payroll and Benefits | 45         |
| Section 5.21 | Certain Commercial Arrangements                                                   | 45         |
| Section 5.22 | German Corporate Group Arrangements                                               | 46         |
| Section 5.23 | Restrictive Covenants                                                             | 47         |
| Section 5.24 | Transition Services Agreement                                                     | 49         |
| Section 5.25 | REACH                                                                             | 50         |
|              |                                                                              |       |
| ARTICLE 6         | CONDITIONS PRECEDENT TO OBLIGATION TO CLOSE                                       | 50         |
| Section 6.1  | Conditions to the Obligation of the Purchaser                                     | 50         |
| Section 6.2  | Conditions to the Obligation of the Seller                                        | 51         |
|              |                                                                              |       |
| ARTICLE 7         | TERMINATION                                                                       | 51         |
| Section 7.1  | Termination Events                                                                | 51         |
| Section 7.2  | Effect of Termination                                                             | 52         |
| Section 7.3  | Certain Effects of Termination                                                    | 53         |
|              |                                                                              |       |
| ARTICLE 8         | INDEMNIFICATION                                                                   | 54         |
| Section 8.1  | Indemnification by the Seller                                                     | 54         |
| Section 8.2  | Indemnification by the Purchaser                                                  | 54         |
| Section 8.3  | Claim Procedure                                                                   | 54         |
| Section 8.4  | Survival                                                                          | 55         |
| Section 8.5  | Limitations on Liability                                                          | 56         |
| Section 8.6  | Exclusive Remedy                                                                  | 56         |
|              |                                                                              |       |
| ARTICLE 9         | TAX MATTERS                                                                       | 57         |
| Section 9.1  | Liability and Indemnification for Taxes                                           | 57         |
| Section 9.2  | Tax Return Filing; Audit Responsibilities                                         | 58         |
| Section 9.3  | Cooperation                                                                       | 59         |
| Section 9.4  | No Code Section 338 Election                                                 | 59         |
|              |                                                                              |       |
| ARTICLE 10        | EMPLOYEE MATTERS                                                                  | 59         |
| Section 10.1 | Employees                                                                         | 59         |
|                   |                                                                                   |            |  |

 

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**TABLEOF CONTENTS**

(continued)

 
| ** **         | ** **                                             | **Page**   |
|--------------------|--------------------------------------------------------|------------|
| ** **         | ** **                                             | ** ** |
| Section 10.2  | Defined Benefit Plans                                  | 61         |
| Section 10.3  | Defined Contribution Plan                              | 62         |
| Section 10.4  | Welfare Arrangements                                   | 62         |
| Section 10.5  | WARN Act                                               | 62         |
| Section 10.6  | No Third-Party Beneficiaries                           | 63         |
| Section 10.7  | Negotiations with Employees                            | 63         |
|               |                                                   |       |
| ARTICLE 11         | ENVIRONMENTAL MATTERS                                  | 63         |
| Section 11.1  | Indemnification by the Seller                          | 63         |
| Section 11.2  | Survival                                               | 63         |
| Section 11.3  | Limitations on Liability                               | 64         |
| Section 11.4  | Procedure for Indemnification For Environmental Losses | 66         |
| Section 11.5  | Taft Air Issue                                         | 69         |
|               |                                                   |       |
| ARTICLE 12         | GENERAL PROVISIONS                                     | 69         |
| Section 12.1  | Notices                                                | 69         |
| Section 12.2  | Amendment                                              | 70         |
| Section 12.3  | Specific Performance                                   | 70         |
| Section 12.4  | Waiver and Remedies                                    | 71         |
| Section 12.5  | Entire Agreement                                       | 71         |
| Section 12.6  | Assignment, Successors and No Third Party Rights       | 71         |
| Section 12.7  | Severability                                           | 71         |
| Section 12.8  | Exhibits and Schedules                                 | 71         |
| Section 12.9  | Interpretation                                         | 72         |
| Section 12.10 | Expenses                                               | 72         |
| Section 12.11 | Governing Law                                          | 72         |
| Section 12.12 | Limitation on Liability                                | 72         |
| Section 12.13 | Jurisdiction and Service of Process                    | 72         |
| Section 12.14 | Waiver of Jury Trial                                   | 72         |
| Section 12.15 | No Joint Venture                                       | 73         |
| Section 12.16 | Counterparts                                           | 73         |
|                    |                                                        |            |  |

 

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| Exhibits                   |   |                                     |
|----------------------------|--------|------------------------------------------|
|                       |   |                                     |
| Exhibit A             |   | Deposit  Agreement                       |
| Exhibit B             |   | Bill  of Sale                            |
| Exhibit C             |   | Assignment  and Assumption Agreement     |
| Exhibit D             |   | Share  Transfer Agreement                |
| Exhibits  E-1, E-2 and E-3 |   | IP  Assignments and IP License Agreement |
| Exhibit F             |   | Transition  Services Agreement           |
| Exhibit G             |   | TBT  Supply Agreement                    |
| Exhibit H             |   | TOT  Supply Agreement                    |
| Exhibit I             |   | TPP/LPE  Supply Agreement                |
| Exhibit J             |   | Ciba  Environmental Indemnity Assignment |
| Exhibit K             |   | Bidding  Procedures Order                |
| Exhibit L             |   | Approval  Order                          |

 

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**SHARE AND ASSET PURCHASE AGREEMENT**

 

ThisShare and Asset Purchase Agreement (the “Agreement”) is made as of December 23,2009, by and among Chemtura Corporation, a Delaware corporation (the “Seller”),SK Atlas, LLC, a Delaware limited liability company (the “Purchaser”) andSK Capital Partners II, LP, a Delaware limited liability company (“SK”).  Capitalized terms used in this Agreementshall have the meanings given to such terms in Article 1.

 

TheSeller and the Acquired Company (as defined below) are engaged in the Business.  This Agreement contemplates the sale andtransfer to the Purchaser of certain of the assets and liabilities relating tothe Business, including the shares of the capital stock of the AcquiredCompany.

 

TheSeller and certain of its Subsidiaries have filed voluntary petitionsinitiating cases under Chapter 11 of the Bankruptcy Code in the BankruptcyCourt and intend that the transactions contemplated by this Agreement, insofaras they relate to the Purchased Assets and the Assumed Liabilities, shall be implementedthrough the filing of the Sale Motion, subject to better and higher bids,pursuant to Section 363 of the Bankruptcy Code seeking approval of thetransactions contemplated by this Agreement.

 

NOW,THEREFORE, intending to be legally bound and in consideration of the mutualprovisions set forth in this Agreement and for other good and valuableconsideration, the receipt and sufficiency of which are hereby acknowledged,the parties agree as follows:

 

**ARTICLE 1DEFINITIONS AND CONSTRUCTION**

 

Section 1.1             Definitions.  For the purposes of this Agreement and theAncillary Agreements:

 

“AccruedPayroll and Benefits Adjustment Payment” means an amount equal to theoutstanding payroll and benefits to be paid to Employees or their benefitprovider(s) for services rendered through the Closing Date, which amountthe Purchaser has received written notice of at least five (5) BusinessDays prior to the Closing Date.

 

“AcquiredCompany” means Chemtura Vinyl Additives GmbH, a company duly organized andexisting in accordance with the laws of the Federal Republic of Germany,registered with the commercial register of the local court (Amtsgericht)Darmstadt under HRB 61629.

 

“AcquiredCompany Employee” means any individual who, as of the Closing Date, is anemployee of the Acquired Company.

 

“Affiliate”means, with respect to a specified Person, a Person that directly, orindirectly through one or more intermediaries, controls, is controlled by or isunder common control with, the specified Person.  For purposes of this definition, the term “control”(including the terms “controlling,” “controlled by” and “under common controlwith”) means the possession, direct or indirect, of the power to direct orcause the direction of the management and policies of a Person, whether throughthe ownership of voting securities, by contract or otherwise.

 

“AffiliatedGroup” means a group of corporations with which the Acquired Company hasfiled consolidated, combined, unitary or similar Tax Returns.

 

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“AlternativeTransaction” means, in accordance with the Bid Procedures Order or suchother bidding procedures order or other order as may be approved by theBankruptcy Court, the sale, transfer, lease or other disposition, whetherthrough an asset sale, stock sale, merger or similar transaction, of all orsubstantially all the Purchased Assets or the Shares in a transaction or seriesof transactions with a party or parties other than the Purchaser.

 

“AncillaryAgreements” means, collectively, the Deposit Agreement, the Bill of Sale,the Assignment and Assumption Agreement, the Share Transfer Agreement, the IPAssignments, the Transition Services Agreement, the TBT Supply Agreement, the TOTSupply Agreement, the Weston 705 Supply Agreement, the IP License Agreement,the TPP/LPE Supply Agreement, the TNPP Supply Agreement and the IsopetronateHL-44 Toll Manufacturing Agreement.

 

“AntitrustLaws” means any antitrust, competition or trade regulatory Laws.

 

“BankruptcyCode” means 11 U.S.C. Section 101, et. seq., as it may be amendedduring the Case.

 

“Bankruptcy Court”means the United States Bankruptcy Court for the Southern District of New York,or any other court having jurisdiction over the Case from time to time.

 

“Bankruptcy CourtOrders” means the Bidding Procedures Order and the Approval Order.

 

“BaseWorking Capital” means an amount equal to the sum of (i) €24,363,000for the Acquired Company (as converted to U.S. dollars based on the euroforeign exchange reference rate published in the Wall Street Journal on theClosing Date) and (ii) $35,432,930 for the Business (other than theAcquired Company).

 

“Business”means the design, manufacture, assembly, marketing, sale and distribution oftin and mixed metal stabilizers, organic based stabilizers (OBS), epoxidizedsoybean oil, liquid phosphite esters, chemical foaming agents and impactmodifiers, and related intermediates of each of the foregoing, as engaged in bythe Seller at its Taft, Louisiana facility, and by the Acquired Company, ineach case prior to the Closing.

 

“BusinessDay” means any day other than Saturday, Sunday or any day on which bankinginstitutions in New York, New York are closed either under applicable Law oraction of any Governmental Authority.

 

“Case”means the bankruptcy case arising from the filing under Chapter 11 of theBankruptcy Code of the Seller and certain of its Subsidiaries, jointlyadministered as Case No. 09-11233 in the Bankruptcy Court.

 

“CashEquivalents” means checks, money orders, marketable securities, short-terminstruments, prepaid expenses (except prepayments for the Prepaid Inventory),security deposits and other cash equivalents, funds in time and demand depositsor similar accounts and any evidence of indebtedness issued or guaranteed byany Governmental Authority.

 

“Ciba”means Ciba Spezialitätenchemie Lampertheim GmbH (or its successors ininterest).

 

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“CibaBasic Agreement” means that certain swap agreement between Ciba, the Seller(at that time named Witco Corporation) and the Share Selling Affiliate (at thattime named Witco GmbH), dated May 29, 1998.

 

“Claims”means any charges, mortgages, pledges, security interests, escrows, options,rights of first refusal, indentures, security agreements or other encumbrances,claims, agreements, arrangements or commitments of any kind or character andwhether or not relating in any way to credit or the borrowing of money.

 

“ClosingNet Working Capital” means (a) the sum of (i) the AccountsReceivable plus the notes and trade accounts receivable of the AcquiredCompany, and (ii) the Inventory, the Prepaid Inventory plus the inventoryof the Acquired Company, minus (b) the accounts payable and other currentliabilities of the Acquired Company, in each case calculated as of the close ofbusiness on the Closing Date, in accordance with the Calculation Principles andwith the line items contained in the sample of the Final Closing Net WorkingCapital set forth in Schedule 2.6(h).

 

“Code”means the Internal Revenue Code of 1986, as amended from time to time, or anysuccessor statute.  Any reference hereinto a particular provision of the Code shall mean, where appropriate, thecorresponding provision in any successor statute.

 

“ConsignmentRaw Material Inventory” means inventory physically present at any RealProperty of the Business, which is owned by a third party subject to purchaseon consignment by the Business.

 

“Contract”means any contract, agreement, lease, license, commitment, understanding,franchise, warranty, guaranty, mortgage, note, bond or other instrument orconsensual obligation that is legally binding.

 

“CureCosts” means the amount to cure any payment or other default under anyIncluded Contract assumed by the Purchaser pursuant to Section 365 of theBankruptcy Code.

 

“DesignatedAffiliate” means an Affiliate of the Purchaser which is designated by thePurchaser as the purchaser of the Acquired Company and such designation (a) isreasonably acceptable to the Seller, (b) does not impede or delay in anyway the ability of the parties to close the transactions contemplated by thisAgreement, (c) does not directly or indirectly prejudice or increase thecosts (including any Taxes) to the Seller or the Share Selling Affiliate and (d) ismade in accordance with Section 5.14.  The Purchaser acknowledges and agrees thatany delay in any attempt to make such a designation will be considered indetermining whether such designation is made in compliance with clauses (b) and(c) of this definition.

 

“Employee”means any individual who, as of the Closing Date, is an employee of the Seller,or an Affiliate of the Seller (other than the Acquired Company) on the datehereof or hired after the date hereof, who performs services primarily onbehalf of the Business.  An individualwho would otherwise satisfy this definition but who is absent from activeemployment on the Closing Date on account of vacation, sick leave, disabilityleave, leave under any local Law which preserves employment or reemploymentrights for the individual, or any other similar reason, shall nonetheless be an“Employee” hereunder.

 

“Encumbrance”means (a) any lien, mortgage, deed of trust, deed to secure debt, pledge,restriction on transfer, proxy and voting or other agreement, claim, charge,security interest,

 

3

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easement,right of way, encroachment, servitude, right of first option, right of fastrefusal, preemptive right or similar restriction, or other encumbrance, optionor defect on title of every type and description, whether imposed by law,agreement, understanding or otherwise, including all liens, encumbrances, andinterests in property as set forth in Section 363 of the Bankruptcy Code, (b) violationsof set-back requirements or similar violations, or (c) any other issuesrelated to title, survey or zoning with respect to the Real Property; *but does not include* (u) carrier’s, warehousemen’s,mechanic’s, materialman’s and other similar liens with respect to amounts thatare not yet due and payable or that are being contested in good faith, (v) liensfor Taxes that are not yet due and payable or that are being contested in goodfaith, (w) liens securing rental payments under capital leasearrangements, (x) restrictions on the transferability of securitiesarising under applicable securities Laws (to the extent enforceable pursuant toapplicable bankruptcy Law), (y) restrictions arising under applicablezoning and other land use Laws that do not, individually or in the aggregate,have a material adverse effect on the present use or occupancy of the propertysubject thereto, or (z) defects, easements, rights of way, restrictions,covenants, claims, subleases or similar items relating to real property that donot, individually or in the aggregate, have a material adverse effect on thepresent use or occupancy of the real property subject thereto.

 

“EnvironmentalLaw” means any Law concerning (a) the treatment, disposal, emission,discharge, Release or threatened Release of, or exposure to, any HazardousMaterial or (b) the protection of health (including worker health andsafety) and the environment (including natural resources, air and surface orsubsurface land or waters).

 

“ERISA”means the Employee Retirement Income Security Act of 1974.

 

“EuropeanTrade Accounts Payable Adjustment Payment” means an amount equal to theoutstanding European Trade Accounts Payable which are not past due, whichamount the Purchaser has received written notice of at least one (1) BusinessDay prior to the Closing Date.

 

“Final Order”means an order of the Bankruptcy Court or other court of competentjurisdiction:  (a) as to which noappeal, notice of appeal, motion to amend or make additional findings of fact,motion to alter or amend judgment, motion for rehearing or motion for newtrial, request for stay, motion or petition for reconsideration, application orrequest for review, or other similar motion, application, notice or request(collectively, a “Challenge”) has been timely filed, or, if any of theforegoing has been timely filed, it has been disposed of in a manner thatupholds and affirms the subject order in all respects without the possibilityfor further Challenge thereon; (b) as to which the time for instituting orfiling a Challenge shall have expired; and (c) as to which no stay is ineffect.

 

“GAAP”means United States generally accepted accounting principles.

 

“GovernmentalAuthority” means any (a) nation, region, state, county, city, town,village, district or other jurisdiction, (b) federal, state, local,municipal, foreign or other government, (c) governmental orquasi-governmental authority of any nature (including any governmental agency,branch, department or other entity and any court or other tribunal), (d) multinationalorganization exercising judicial, legislative or regulatory power or (e) bodyexercising, or entitled to exercise, any administrative, executive, judicial,legislative, police, regulatory or taxing authority or power of any nature ofany federal, state, local, municipal, foreign or other government.

 

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“GovernmentalAuthorization” means any approval, consent, ratification, waiver, license,permit, registration or other authorization issued or granted by anyGovernmental Authority.

 

“HazardousMaterial” means any waste, chemical, material or other substance that islisted, defined, designated or classified as hazardous, radioactive or toxic ora pollutant or a contaminant under any Environmental Law, including any mixtureor solution thereof, and including petroleum and all derivatives thereof,asbestos or asbestos-containing materials in any form or condition,polychlorinated biphenyls and any other waste, chemical, material or othersubstance in any amount or concentration that is regulated or for whichliability can be imposed under any Environmental Law.

 

“InitialConsideration” means the sum of the Initial Cash Consideration, the TradeAccounts Payable Adjustment Payment, the European Trade Accounts PayableAdjustment Payment, the Shared Accounts Payable Adjustment Payment, the AccruedPayroll and Benefits Adjustment Payment and the Assumed Liabilities.

 

“IntellectualProperty” means all of the following anywhere in the world and all legalrights, title or interest in the following arising under Law: (a) allpatents and applications for patents and all related reissues, reexaminations,divisions, renewals, extensions, provisionals, continuations and continuationsin part; (b) all copyrights, copyright registrations and copyrightapplications, copyrightable works and all other corresponding rights; (c) allmask works, mask work registrations and mask work applications and all othercorresponding rights; (d) all trade dress and trade names, logos, Internetaddresses and domain names, trademarks and service marks and relatedregistrations and applications, including any intent to use applications,supplemental registrations and any renewals or extensions, all other indicia ofcommercial source or origin and all goodwill associated with any of theforegoing; (e) all inventions (whether patentable or unpatentable andwhether or not reduced to practice), know how, technology, technical data(including lab notebooks), trade secrets, confidential business information,manufacturing and production processes and techniques, product formulations,chemical formulations, research and development information, REACH reformulationdata and results, experimentation data and results, product developmentinformation and application data sheets including testing procedures,financial, marketing and business data, pricing and cost information, businessand marketing plans, advertising and promotional materials, customer,distributor, reseller and supplier lists and information including pricingterms and history, correspondence, records, and other documentation, and otherproprietary information of every kind; (f) all computer software(including source and object code), firmware, development tools, algorithms,files, records, technical drawings and related documentation, process flowdiagrams, material of construction information, bill of materials, piping andinformation diagrams, front end engineering and design (FEED) studies, materialsafety data sheets (MSDS) and tech service data, data and manuals; (g) allstrategy and marketing data and marketing studies, advertisements, trade adsand tradeshow materials; (h) all databases and data collections, includingcustomer contact data and customer call reports; and (i) all otherintellectual property rights.

 

“Intermediate Products”means those products that are the subject of the Supply Agreements.

 

“IRS”means the United States Internal Revenue Service and, to the extent relevant,the United States Department of Treasury.

 

“Judgment”means any order, injunction, judgment, decree, ruling, assessment orarbitration award of any Governmental Authority or arbitrator.

 

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“Knowledge”or “Known” means, with respect to the Seller, the actual knowledge,following reasonable inquiry (which shall consist of the level of inquiry setforth in Section 1.1(a) of the Seller Disclosure Schedule), ofany of the executive officers or senior managerial employees of the Sellerlisted in Section 1.1(a) of the Seller Disclosure Schedule.

 

“KnownEnvironmental Liability” means any Liability under Environmental Lawsrelated to the Taft, Louisiana facility arising from (a) any Proceedingpending or threatened on or before the date hereof, (b) any Release of orany exposure of any Person to any Hazardous Materials at, on, in, to, from orunder the Owned Real Property identified on or before the date hereof,including the subsequent migration of such Hazardous Materials from the OwnedReal Property, (c) any environmental fact or condition that occurred orexisted and is identified on or before the date hereof, and (d) anyviolation of Environmental Law or Environmental Authorization by the Businessor Seller that occurred on or before the date hereof, until such violation isresolved pursuant to the terms of Article 11, in each case of (a) through(d), only to the extent identified on Schedule 1.1(a).

 

“Law”means any federal, state, local, municipal, foreign, international,multinational, or other constitution, law (including common law), statute,treaty, rule, regulation, ordinance or code.

 

“Liability”means any liability or obligation, whether known or unknown, absolute orcontingent, accrued or unaccrued, liquidated or unliquidated, due or to becomedue.

 

“Loss”means any direct and actual Liabilities, losses, damages, Judgments, fines,penalties, costs or expenses (including reasonable attorney’s or otherprofessional fees and expenses) but excluding any special, incidental,indirect, exemplary, punitive or consequential damages (including lost profits,loss of revenue or lost sales, or amounts calculated as a multiple of earnings,profits, revenue, sales or other measure).

 

“MaterialAdverse Effect” means any event, change, circumstance, effect or othermatter that has a material adverse effect on the financial condition, resultsof operations or business prospects of the Business, taken as a whole; provided,however, that none of the following, either alone or in combination,will constitute, or be considered in determining whether there has been, aMaterial Adverse Effect:  any event,change, circumstance, effect or other matter resulting from or related to (i) anyoutbreak or escalation of war or major hostilities or any act of terrorism, (ii) changesin Laws, GAAP or enforcement or interpretation thereof, (iii) changes thatgenerally affect the industries and markets in which the Business operates, (iv) changesin financial markets, general economic conditions (including prevailinginterest rates, exchange rates, commodity prices and fuel costs) or politicalconditions, (v) any failure, in and of itself, of the Business to meet anypublished or internally prepared projections, budgets, plans or forecasts ofrevenues, earnings or other financial performance measures or operatingstatistics (it being understood that the facts and circumstances underlying anysuch failure that are not otherwise excluded from the definition of a “MaterialAdverse Effect” may be considered in determining whether there has been aMaterial Adverse Effect), (vi) any action taken or failed to be takenpursuant to or in accordance with this Agreement or at the request of, orconsented to by, the Purchaser, or (vii) the execution or delivery of thisAgreement, the consummation of the transactions contemplated by this Agreementor the public announcement or other publicity with respect to any of theforegoing.

 

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“Person”means an individual or an entity, including a corporation, share company,limited liability company, partnership, trust, association or other business orinvestment entity, or any Governmental Authority.

 

“PetitionDate” means March 18, 2009.

 

“Post-ClosingPeriod” means any taxable period or portion of a period that begins afterthe Closing Date.

 

“Pre-ClosingPeriod” means any taxable period or portion of a period that ends on orbefore the Closing Date, including that portion of any Straddle Period ending onthe Closing Date.

 

“PrepaidInventory” means goods not received by the Business on or before theClosing Date that have been paid for by the Seller on or before the ClosingDate.

 

“Proceeding”means any action, arbitration, audit, examination, investigation, hearing,litigation or suit (whether civil, criminal, administrative, judicial orinvestigative, whether formal or informal, and whether public or private)commenced, brought, conducted or heard by or before, or otherwise involving,any Governmental Authority or arbitrator.

 

“PurchaserDeemed Entity Value” means $38,000,000.

 

“PurchaserIntermediate Products” means those products that are the subject of theSupply Agreements and which were sold by the Business at any time from January 1,2008 until the Closing Date.

 

“RealProperty” means, collectively, the Owned Real Property, the AcquiredCompany Owned Real Property and the Acquired Company Leased Real Property.

 

“Release”means the release, spill, emission, leaking, pumping, pouring, emptying, escaping,dumping, injection, deposit, disposal, discharge, dispersal, leaching ormigrating of any Hazardous Material into the environment.

 

“Remediation”and “Remediate” mean investigation, testing, analysis, monitoring, riskassessment, removal, remedial action, cleanup, installation and implementationof institutional, engineering or other controls, and any other actionsreasonably necessary to address or resolve a Release of Hazardous Material.

 

“Retained BusinessProduct” means any product manufactured and sold by the Seller or any ofits Affiliates from January 1, 2008 until the Closing Date and whichrelate to Seller’s Antioxident/Ultra Violet Stabilizer business, PetroleumAdditives business or Organometallic Specialties business but shall explicitlyexclude any products exclusively manufactured by the Business on or beforeClosing.

 

“Schedule” means theSeller Disclosure Schedule or the SAPA Disclosure Schedule, as the contextrequires.

 

“SellerIntermediate Products” means those products that are the subject of theSupply Agreements and which were sold by the Seller’s Antioxident/Ultra VioletStabilizer business or its Organometallic Specialties business at any time fromJanuary 1, 2008 until the Closing Date.

 

7

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“SellerPlan” means any Contract, plan, commitment, fund or program maintained,sponsored, owed, adopted, contributed to, or followed by the Seller, anySelling Affiliate, the Acquired Company or any of their respective Affiliates,providing compensation (other than salary), benefits, pension, retirement,superannuation, profit sharing, stock bonus, stock option, stock purchase,phantom or stock equivalent, bonus, incentive, deferred compensation,hospitalization, medical, dental, vision, vacation, life insurance, deathbenefit, sick pay, disability, severance, termination indemnity, redundancypay, educational assistance, holiday pay, housing assistance, moving expensereimbursement, fringe benefit or similar employee benefits to Employees or AcquiredCompany Employees Company and former directors, officers, employees or agentsemployed or formerly employed or otherwise retained or formerly retainedprimarily in the operation of the Business or by the Acquired Company, butexcluding (a) any Contract, plan, fund or program required to bemaintained by the Laws of the jurisdiction in which the Employee or AcquiredCompany Employee is working and (b) any governmental plan or programrequiring the mandatory payment of social insurance Taxes or similar contributionsto a governmental fund with respect to the wages of an employee.

 

“ShareSelling Affiliate” means Chemtura Organometallics GmbH, a company dulyorganized and existing in accordance with the laws of the Federal Republic ofGermany, registered with the commercial register of the local court(Amtsgericht) Hamm under HRB 4711.

 

“SharedAccounts Payable Adjustment Payment” means an amount equal to $200,000.

 

“SharedIntellectual Property” means registered trademarks used by the Business andalso used by the Seller or any Affiliate of the Seller in the ordinary courseof business and all other Intellectual Property used by both the Seller or anyAffiliate of the Seller and by the Business, and not used exclusively by theBusiness, which are retained by the Seller and its relevant Affiliates andlicensed to the Purchaser pursuant to Exhibit E-3.

 

“Shares”means all of the issued and outstanding capital stock of the Acquired Company.

 

“StraddlePeriod” means any taxable period that begins before and ends after theClosing Date.

 

“Subsidiary”means, with respect to a specified Person, any corporation or other Person ofwhich securities or other interests having the power to elect a majority ofthat corporation’s or other Person’s board of directors or similar governingbody, or otherwise having the power to direct the business and policies of thatcorporation or other Person (other than securities or other interests havingsuch power only upon the happening of a contingency that has not occurred) areheld by the specified Person or one or more of its Subsidiaries.

 

“Supply Agreements”means the TBT Supply Agreement, the TOT Supply Agreement, the TPP/LPE SupplyAgreement, the Weston 705 Supply Agreement, the Isopetronate HL-44 SupplyAgreement and the TNPP Supply Agreement.

 

“TaftAir Issue” means any emissions from and operational parameters of EmissionPoint No. 001-05GP (Thermal Oxidizer UB-1300 Control Device) in excess ofemission limits or operational requirements established by any GovernmentalAuthorization or Environmental Law.

 

“Tax”means (a) any federal, state, local, foreign or other tax, charge, fee,duty (including customs duty), levy or assessment, including any income, grossreceipts, net proceeds, alternative or add-on minimum, corporation, ad valorem,turnover, real property, personal property (tangible

 

8

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orintangible), sales, use, franchise, excise, escheat, abandoned or unclaimedproperty, VAT, stamp, leasing, lease, user, transfer, fuel, excess profits,profits, occupational, premium, interest equalization, windfall profits,severance, license, registration, payroll, environmental, capital stock,capital duty, disability, estimated, gains, wealth, welfare, employee’s incomewithholding, other withholding, unemployment or social security or other tax ofwhatever kind (including any fee, assessment or other charges in the nature ofor in lieu of any tax) that is imposed by any Governmental Authority, (b) anyinterest, fines, penalties or additions resulting from, attributable to, orincurred in connection with any items described in this paragraph or anyrelated contest or dispute and (c) any Liability for the Taxes of anotherPerson.

 

“TaxAttributes” means any net operating loss, net capital loss, investment taxcredit, foreign tax credit, charitable deduction or any other tax credit or taxattribute that could be carried forward or back to reduce Taxes (includingdeductions and credits relating to alternative minimum Taxes).

 

“TaxContest” means an audit, claim, dispute or controversy relating to Taxes.

 

“TaxReturn” means any report, return, declaration, claim for refund, orinformation return or statement related to Taxes, including any schedule orattachment thereto, and including any amendment thereof, required to be filedwith a Governmental Authority.

 

“TradeAccounts Payable Adjustment Payment” means an amount equal to $7,156,610.

 

“UnknownEnvironmental Liability” means any Liability under Environmental Lawsrelated to the Taft, Louisiana facility (excluding any Known EnvironmentalLiability) arising from (a) any Release of or any exposure of any Personto any Hazardous Materials at, on, in, to, from or under the Owned RealProperty that occurred on or before the Closing Date, including the subsequentmigration of such Hazardous Materials from the Owned Real Property, (b) anyenvironmental fact or condition that occurred or existed on or before theClosing Date; (c) any violation of Environmental Law or EnvironmentalAuthorization by the Business or the Seller that occurred on or before theClosing Date, until such violation is resolved pursuant to the terms of Article 11;or (d) any Proceeding asserted in response to (a) through (c) above.

 

“VAT”means any value-added Tax, goods and services Tax or similar Tax, includingsuch Tax as may be levied in accordance with (but subject to derogation from)EEC Directive 77/388/EEC.

 

“WARNAct” means the Worker Adjustment and Retraining Notification Act of 1988,and any similar foreign, state or local Law.

 

Section 1.2             Additional Defined Terms.  For purposes of this Agreement and theAncillary Agreements, the following terms have the meanings specified in theindicated Section of this Agreement:

 
| **Defined  Term**                       | ** ** | **Section** |
|-----------------------------------------|------------|-------------|
| Accounts  Receivable                    |       | 2.1(b)(ii)  |
| Accrued  Payroll and Benefits           |       | 2.4(e)      |
| Acquired  Company Intellectual Property |       | 3.10        |
| Acquired  Company Leased Real Property  |       | 3.9(b)      |
| Acquired  Company Real Property         |       | 3.9(a)      |
| Adjustment  Calculation                 |       | 2.6(a)      |

 

9

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| **Defined  Term**                        | ** ** | **Section**  |
|------------------------------------------|------------|--------------|
| Adjustment  Notice                       |       | 2.6(a)       |
| Affiliate  Indemnified Party             |       | 5.12         |
| Agreement                                |       | Preamble     |
| Approval  Notification                   |       | 11.4(f)      |
| Approval  Order                          |       | 5.3(a)       |
| Assignment  and Assumption Agreement     |       | 2.9(a)(ii)   |
| Assumed  Liabilities                     |       | 2.3          |
| Bankruptcy  Avoidance Actions            |       | 2.2(m)       |
| Bidding  Procedures Order                |       | 5.3(a)       |
| Bill  of Sale                            |       | 2.9(a)(i)    |
| Bonus  Payments                          |       | 10.1(e)      |
| Breakup  Fee                             |       | 7.2(b)       |
| Business  Information                    |       | 5.9(b)       |
| Business  Intellectual Property Rights   |       | 3.10         |
| Calculation  Principles                  |       | 2.6(a)       |
| Chosen  Court                            |       | 12.13        |
| Ciba  Environmental Indemnity Assignment |       | 2.9(a)(xiii) |
| Claim  Notice                            |       | 8.3(a)       |
| Closing                                  |       | 2.8          |
| Closing  Allocation Schedule             |       | 2.7(a)       |
| Closing  Date                            |       | 2.8          |
| Commitment  Letters                      |       | 4.7          |
| Confidentiality  Agreement               |       | 5.9(a)       |
| Continuation  Period                     |       | 10.1(c)      |
| Controlling  Party                       |       | 8.3(d)       |
| Control  Notice                          |       | 11.4(b)      |
| Deposit  Agent                           |       | 2.5(b)(i)    |
| Deposit  Agreement                       |       | 2.5(b)(i)    |
| Deposit  Amount                          |       | 2.5(b)(i)    |
| Dispute  Notice                          |       | 2.6(c)(ii)   |
| Dispute  Notification                    |       | 11.4(f)      |
| Environmental  Authorizations            |       | 3.15(a)      |
| Environmental  Claim                     |       | 11.4(a)      |
| Environmental  Claim Notice              |       | 11.4(a)      |
| Environmental  Response Action           |       | 11.4(b)      |
| Environmental  Investigation             |       | 11.3(b)      |
| Environmental  Losses                    |       | 11.3(b)      |
| Environmental  Response Action           |       | 11.4(b)      |
| Environmental  Response Action Proposal  |       | 11.4(e)      |
| European  Trade Accounts Payable         |       | 2.4(c)       |
| Excluded  Assets                         |       | 2.2          |
| Excluded  Intellectual Property          |       | 2.2(h)       |
| Excluded  Liabilities                    |       | 2.4          |
| Final  Cash Consideration                |       | 2.5(a)       |
| Final  Closing Net Working Capital       |       | 2.6(a)       |
| Financial  Statements                    |       | 3.5          |
| German  GAAP Financial Statements        |       | 5.22(b)      |
| Governmental  Antitrust Authority        |       | 5.5(a)       |
| Initial  Allocation Schdule              |       | 2.7(a)       |
| Included  Contracts                      |       | 2.1(b)(iii)  |

 

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| **Defined  Term**                                | ** ** | **Section**    |
|--------------------------------------------------|------------|----------------|
| Income  Statement                                |       | 3.5            |
| Indemnified  Party                               |       | 8.3(a)         |
| Indemnifying  Party                              |       | 8.3(a)         |
| Independent  Accounting Firm                     |       | 2.6(f)         |
| Independent  Consultant                          |       | 11.4(g)        |
| Initial  Allocation Schedule                     |       | 2.7(a)         |
| Initial  Cash Consideration                      |       | 2.5(a)         |
| Inventory                                        |       | 2.1(b)(i)      |
| Inventory  Cap                                   |       | 2.6(b)         |
| IP  Assignments                                  |       | 2.9(a)(v)      |
| IP  License Agreement                            |       | 2.9(a)(v)      |
| Isopetronate  HL-44 Toll Manufacturing Agreement |       | 5.21           |
| Known  Environmental Liability Indemnity Period  |       | 11.2(b)        |
| Known  Environmental Liability Losses            |       | 11.1(b)        |
| Known  Losses Termination Date                   |       | 11.2(b)        |
| Latin  American Purchased Assets                 |       | 2.10(d)        |
| Lease                                            |       | 3.9(b)         |
| Loss  Compensation Claim                         |       | 5.22(b)        |
| Marked  Assets                                   |       | 5.15(b)        |
| Material  Contracts                              |       | 3.11(a)        |
| New  Defined Benefit Plan                        |       | 10.2(a)        |
| Non-Controlling  Party                           |       | 8.3(d)         |
| Off-Site  Liabilities                            |       | 2.4(k)         |
| Other  Purchased Assets                          |       | 2.10(a)        |
| Owned  Real Property                             |       | 2.1(b)(v)      |
| Pension  Plan                                    |       | 10.2(a)        |
| Plan  Assets Amount                              |       | 10.2(b)        |
| Profit  Transfer Claim 2009                      |       | 5.22(b)        |
| Purchase  Price                                  |       | 2.5(a)         |
| Purchased  Assets                                |       | 2.1(b)         |
| Purchased  Intellectual Property                 |       | 2.1(b)(vi)     |
| Purchaser                                        |       | Preamble       |
| Purchaser  Indemnified Parties                   |       | 8.1            |
| Regulation                                       |       | 3.22           |
| Reimbursement                                    |       | 7.2(b)         |
| Sale  Motion                                     |       | 5.3(a)         |
| Savings  Plan                                    |       | 10.3(a)        |
| Seller                                           |       | Preamble       |
| Seller  Disclosure Schedule                      |       | Article 3 |
| Seller  Indemnified Parties                      |       | 8.2            |
| Seller  Information                              |       | 5.15(f)        |
| Seller  Marks                                    |       | 5.15(a)        |
| September ‘09  Net Assets Statement    |       | 3.5            |
| Share  Transfer Agreement                        |       | 2.9(a)(iii)    |
| Shared  Accounts Payable                         |       | 2.4(d)         |
| SK                                               |       | Preamble       |
| TBT  Supply Agreement                            |       | 2.9(a)(x)      |
| TOT  Supply Agreement                            |       | 2.9(a)(xi)     |
| TNPP  Supply Agreement                           |       | 5.21(a)        |
| TPP/LPE  Supply Agreement                        |       | 2.9(a)(xii)    |

 

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| **Defined  Term**                                 | ** ** | **Section** |
|---------------------------------------------------|------------|-------------|
| Third  Party Claim                                |       | 8.3(b)      |
| Third  Party Environmental Claim                  |       | 11.3(b)     |
| Threshold                                         |       | 8.5(a)(ii)  |
| Trade  Accounts Payable                           |       | 2.4(b)      |
| Transferred  Employee                             |       | 10.1(b)     |
| Transfer  Taxes                                   |       | 9.1(e)      |
| Transferred  Employee                             |       | 10.1(b)     |
| Transferred  Former Employee                      |       | 10.1(c)     |
| Transition  Services Agreement                    |       | 2.9(a)(ix)  |
| Unknown  Environmental Liability Indemnity Period |       | 10.2(a)     |
| Unknown  Environmental Liability Losses           |       | 11.1(a)     |
| Unknown  Losses Termination Date                  |       | 11.2(a)     |
| Welfare  Plan                                     |       | 10.4        |
| Weston  705 Supply Agreement                      |       | 5.21        |

 

Section 1.3             Construction.  Any reference in this Agreement to an “Article,”“Section,” “Exhibit” or “Schedule” refers to the corresponding Article,Section, Exhibit or Schedule of or to this Agreement, unless the contextindicates otherwise.  The table ofcontents and the headings of Articles and Sections are provided for convenienceonly and are not intended to affect the construction or interpretation of thisAgreement.  All words used in thisAgreement are to be construed to be of such gender or number as thecircumstances require.  The words “including,”“includes,” or “include” are to be read as listing non-exclusive examples ofthe matters referred to, whether or not words such as “without limitation” or “butnot limited to” are used in each instance. Where this Agreement states that a party “shall”, “will” or “must”perform in some manner or otherwise act or omit to act, it means that the partyis legally obligated to do so in accordance with this Agreement.  Any reference to a statute is deemed also torefer to any amendments or successor legislation as in effect at the relevanttime.  Any reference to a Contract orother document as of a given date means the Contract or other document asamended, supplemented and modified from time to time through such date.

 

**ARTICLE2**

**THETRANSACTION**

 

Section 2.1             Sale andPurchase of Shares and Purchased Assets.

 

(a)           In accordance with the provisions of this Agreement,at the Closing, the Seller will cause the Share Selling Affiliate to sell andtransfer to the Designated Affiliate and the Purchaser will cause itsDesignated Affiliate to purchase and acquire from the Share Selling Affiliate,all of the Shares, free and clear of all Claims.

 

(b)           In accordance with the provisions of this Agreementand except as set forth in Section 2.2, at the Closing, the Sellerwill, and the Seller will cause the Seller Affiliates (solely with respect toany inventory or receivables of the Business located in Europe or Latin Americaas set forth in Section 2.10) to, sell, convey, assign, transferand deliver to the Purchaser, free and clear of all Encumbrances, and thePurchaser will purchase and acquire from the Seller and such Seller Affiliate,if applicable, all of the right, title and interest of the Seller and suchSeller Affiliate, if applicable, in and to all of the following assets(collectively, the “Purchased Assets”):

 

(i)            all finished goodsinventory, goods-in-transit, raw materials and work-in-process and packagingmaterials used or held for use solely and exclusively in the 

 

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Business including those onconsignment or held in the possession of any third party (the “Inventory”);

 

(ii)           all trade accountsreceivable and other rights to payment from third-party customers of theBusiness to the extent allocable to the Business and not to the Seller or itsAffiliates’ unrelated operations, and the full benefit of all security for suchaccounts receivable or rights to payment, including all trade accountsreceivable representing amounts receivable in respect of goods shipped orproducts sold or services rendered to customers of the Business and all otheraccounts or notes receivable to the extent allocable to the Business and thefull benefit of all security for such accounts or notes (the “AccountsReceivable”);

 

(iii)          all of the rights of theSeller under all Contracts exclusively relating to the Business , includingthose Contracts set forth on Schedule 2.1(b)(iii) (collectively,the “Included Contracts”);

 

(iv)          all machinery, equipment,furniture, office supplies, motor vehicles, spare parts, maintenance, repairand overhaul (MRO) inventories, tools, and other items of tangible personalproperty used or held for use by the Seller exclusively in the Business, andthe related interests of the Seller therein;

 

(v)           (A) the real propertyset forth on Schedule 2.1(b)(v)(A) (collectively, the “OwnedReal Property”);

 

(vi)          all Intellectual Propertyowned by the Seller and used exclusively by the Business, including theIntellectual Property set forth on Schedule 2.1(b)(vi) (collectively,the “Purchased Intellectual Property”);

 

(vii)         all goodwill of the Sellerexclusively relating to the Business or the Purchased Assets, other thangoodwill associated with the corporate name of the Seller;

 

(viii)        to the extent transferableunder applicable Law, all Governmental Authorizations held by the Seller to theextent necessary for and exclusively relating to the operation of the Business;

 

(ix)           to the extent transferableunder applicable Law, all books, records, studies, reports, files and papers,exclusively used in the Business (and copies of all books, records, files andpapers used both in the Business and in other Seller operations) to the extentused in the Business, including all advertising materials, client and customerlists, supplier and vendor lists, purchase orders, sales and purchase invoices,production reports, health and safety studies, toxicology studies, personneland employment records, and financial and accounting records other than thecorporate books and records of the Seller;

 

(x)            all of the Seller’s claims,rights, credits, causes of action, defenses and rights of set-off against thirdparties relating to or arising from any of the Purchased Assets or AssumedLiabilities, including unliquidated rights under manufacturers’ and vendors’warranties; and

 

(xi)           all of the Seller’s PrepaidInventory.

 

For purposes of clarity, thePurchased Assets do not include the Shares or any assets of the AcquiredCompany, it being understood that the Designated Affiliate will acquire all ofthe Shares pursuant to Section 2.1(a).

 

Section 2.2             Excluded Assets.  Notwithstanding the terms of Section 2.1the Seller will not sell, convey, assign, transfer or deliver to the Purchaser,and the Purchaser will not purchase or acquire, and the Purchased Assets do notinclude, any assets other than the Purchased 

 

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Assets, including any assetsto related to the Seller’s other business lines and any of the following assets(the “Excluded Assets”):

 

(a)           all cash and Cash Equivalents;

 

(b)           all assets, business lines, properties located atthe real property set forth on Schedule 2.2(b);

 

(c)           all minute books, records, stock ledgers, Taxrecords and all other materials that the Seller is required by Law to retain;

 

(d)           the shares of the capital stock of the Seller andall of the Seller’s or any of its Affiliate’s ownership interest in any Person(other than the Acquired Company);

 

(e)           all insurance policies, binders and claims andrights thereunder and proceeds thereof;

 

(f)            all rights under all Contracts of the Seller otherthan the Included Contracts, including the shared Contracts set forth on Schedule2.2(f);

 

(g)           all rights to refunds, credits or similar benefitsrelating to Taxes and other governmental charges of whatever natureattributable to the Pre-Closing Period;

 

(h)           all intellectual property rights of the Seller andits Affiliates other than the Purchased Intellectual Property, including theShared Intellectual Property (the “Excluded Intellectual Property”);

 

(i)            all real property and rights in respect of realproperty, other than as described in Section 2.1(b)(v);

 

(j)            other than the rights to receive the servicespursuant to the terms of the Transition Services Agreement, all rights toreceive services and benefits of the kind provided to the Business by theSeller or any Affiliate of the Seller, either directly or indirectly throughthird-party service providers, prior to the Closing Date, including (A) computerand information processing services, (B) finance, accounting and payrollservices, (C) facilities management services (including environmental,health and safety), (D) treasury services (including banking, insurance,administration, taxation and internal audit), (E) general andadministrative services, (F) executive and management services, (G) legalservices, (H) human resources services, (I) risk management services,(J) group purchasing services, (K) corporate marketing, strategy anddevelopment services, (L) corporate travel and aircraft services and (M) investorrelation services;

 

(k)           all rights in connection with and assets of anySeller Plan, except as otherwise expressly provided in Article 10;

 

(l)            all intercompany receivables, loans and investments (i) betweenSeller or any of its Subsidiaries, on the one hand, and Seller or any of itsSubsidiaries, on the other hand, or (ii) required to be settled in accordancewith Section 5.19;

 

(m)          any and all avoidance or other causes of actionarising under Sections 510, 544 through 550 and 553 of the Bankruptcy Code orunder similar state laws (collectively, the “Bankruptcy Avoidance Actions”);

 

(n)           all rights arising under any Excluded Liability;

 

(o)           all assets and other rights relating to the Businesssold or otherwise transferred or disposed of during the period from the date ofthis Agreement through and including the Closing Date, in any event inaccordance with the provisions of this Agreement; and

 

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(p)           all rights of the Seller or any of its Affiliatesunder this Agreement or any of the Ancillary Agreements to which the Seller orany of its Affiliates is a party.

 

For purposes of clarity, theExcluded Assets do not include the Shares or any assets of the AcquiredCompany.

 

Section 2.3             Assumed Liabilities.  In accordance with the provisions of thisAgreement, at the Closing, subject to Article 11, the Purchaserwill assume and pay or perform and discharge when due any and all of theLiabilities of the Seller to the extent relating to the Business or thePurchased Assets, whether arising on, prior to or following the Closing Date,in each case other than the Excluded Liabilities (the “Assumed Liabilities”).  Subject to Article 11, theAssumed Liabilities include the following:

 

(a)           To the extent reflected in the Final Closing NetWorking Capital, all Liabilities arising after the filing by the Seller of theCase and prior to the Closing, including all Liabilities reserved or accruedwithin the “Other Accrued Expenses” line item for the Taft facility on theFinal Closing Net Working Capital (other than (i) Taxes for anyPre-Closing Period or otherwise allocated to the Pre-Closing Period pursuant toSection 9.1(c), (ii) the Trade Accounts Payable, (iii) theEuropean Trade Accounts Payable, (iv) the Shared Accounts Payable and (v) theAccrued Payroll and Benefits);

 

(b)           all Liabilities for Taxes imposed on the Purchaserpursuant to Section 9.1 or otherwise allocated to the Post-ClosingPeriod pursuant to Section 9.1(c);

 

(c)           all Liabilities of the Seller and the SellingAffiliates arising on, prior to or following the Closing Date under theIncluded Contracts and the Governmental Authorizations included in thePurchased Assets, including payment of the Cure Costs;

 

(d)           all pension obligations, accrued vacation and sicktime relating to the employment of Transferred Employees on or prior to theClosing Date and all Liabilities relating to the employment of the TransferredEmployees arising after the Closing Date;

 

(e)           all Liabilities arising out of or relating to thetermination by the Seller in connection with the transactions contemplated bythis Agreement of, or failure by the Purchaser to hire, any Employees,including any Liabilities to provide benefits or severance with respect to anyEmployee or any of their dependents, beneficiaries and joint annuitants and anyLiabilities arising under the WARN Act and any other Laws requiringnotification to or consultation with Employees or their representatives as aresult of the transactions contemplated by this Agreement;

 

(f)            all Liabilities assumed by the Purchaser and itsAffiliates pursuant to Article 10;

 

(g)           all Liabilities associated with the Owned RealProperty first arising on or following the Closing Date;

 

(h)           all Liabilities relating to or arising out ofEnvironmental Laws or Hazardous Materials, including, except as provided in Article 11,any Known Environmental Liability and any Unknown Environmental Liability,relating to the Business, the Purchased Assets, or the Owned Real Property,arising on, prior to or following the Closing Date, other than the Off-SiteLiabilities (as defined below);

 

(i)            all Liabilities with respect to any return, rebate,recall, warranty or similar liabilities relating to products of the Business;

 

(j)            all Liabilities associated with the Consignment RawMaterial Inventory; and

 

15

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(k)           all other Liabilities arising out of, relating to orincurred in connection with the Business or the Purchased Assets following theClosing Date, including (i) the operation of the Business after theClosing Date, (ii) the use by the Purchaser or its permitted licensees ofPurchased Intellectual Property and (iii) any other condition arising followingthe Closing Date with respect to the Purchased Assets.

 

For purposes of clarity, theAssumed Liabilities do not include any Liabilities of the Acquired Company, allof which will remain Liabilities of the Acquired Company before, on and afterClosing.

 

Section 2.4             Excluded Liabilities.  Notwithstanding any other provision of thisAgreement or any other writing to the contrary, the Purchaser and itsDesignated Affiliates are assuming only the Assumed Liabilities and are notassuming any other Liability of the Seller or any Selling Affiliate of whatevernature, whether presently in existence or arising hereafter.  Such Liabilities include the following (the “ExcludedLiabilities”):

 

(a)           any Liability for Taxes of the Seller or anyAffiliate of the Seller arising or related to any pre-Closing period orattributable to the Business or the Purchased Assets for a Pre-Closing Periodor otherwise allocated to a Pre-Closing Period pursuant to Section 9.1(c) (butspecifically excluding (i) Taxes, if any, imposed on the Seller or anyAffiliate or the Seller and arising out of the operation of the Business orwith respect to the Purchased Assets after the Closing Date, and (ii) Taxesimposed on the Purchaser pursuant to Section 9.1);

 

(b)           all trade accounts payable to third parties andother accrued expenses for the procurement of goods and services arising fromthe conduct of the Business after the Petition Date and prior to the Closing(the “Trade Accounts Payable”);

 

(c)           all trade accounts payable to third parties andother accrued expenses for the procurement of goods and services arising fromthe conduct of Seller Affiliates located in Europe or Asia (other than theAcquired Company) after the Petition Date and prior to the Closing that areattributable to the Business (the “European Trade Accounts Payable”)

 

(d)           all shared accounts payable to third parties for theprocurement of goods and services arising from the conduct of both the Businessand the Seller or any Affiliate of the Seller after the Petition Date and priorto the Closing (the “Shared Accounts Payable”);

 

(e)           all accrued payroll and accrued benefits relating tothe employment of Transferred Employees on or prior to the Closing Date (the “AccruedPayroll and Benefits”);

 

(f)            any Liability arising in connection with any SellerPlan, other than those Liabilities assumed by the Purchaser and its Affiliatespursuant to Article 10;

 

(g)           any Liability arising out of or related to anyExcluded Asset;

 

(h)           all intercompany payables, loans and investments (i) betweenSeller or any of its Subsidiaries, on the one hand, and Seller or any of itsSubsidiaries, on the other hand, or (ii) required to be settled in accordancewith Section 5.19; and

 

(i)            all Encumbrances of which the Purchased Assets arebeing sold free and clear under the Approval Order;

 

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(j)            anyProceedings set forth in Schedule 2.4(j) or filed after the datehereof relating exclusively to pre-Closing activity of the Business (other thana Proceeding to the extent relating to Assumed Liabilities);

 

(k)           allLiabilities arising out of or relating to the off-site transportation,handling, treatment, storage or disposal of any Hazardous Material (other thanmigration of a Hazardous Material from any Owned Real Property) or thearrangement for the same by or on behalf of the Seller, its Affiliates or theirrespective predecessors in connection with the Purchased Assets or theoperation of the Business at the Taft, Louisiana facility prior to Closing (the“Off-Site Liabilities”); and

 

(l)            allLiabilities relating to the employment of employees and former employees of theBusiness who are not Transferred Employees.

 

For purposes of clarity, theExcluded Liabilities do not include any Liabilities of the Acquired Company,all of which will remain Liabilities of the Acquired Company before, or and afterClosing.

 

Section 2.5             Consideration.

 

(a)           Theconsideration for the Purchased Assets and the Shares (the “Purchase Price”)consists of (a) two million fifty six thousand dollars (U.S. $2,056,000)in cash (the “Initial Cash Consideration”), subject to adjustment inaccordance with Section 2.6 (the Initial Cash Consideration, asadjusted, the “Final Cash Consideration”), (b) the Trade AccountsPayable Adjustment Payment, (c) the European Trade Accounts PayableAdjustment Payment, (d) the Shared Accounts Payable Adjustment Payment, (e) theAccrued Payroll and Benefits Adjustment Payment and (f) the assumption ofthe Assumed Liabilities, including the on-site environmental and pensionLiabilities assumed pursuant to Section 2.3.

 

(b)           TheInitial Cash Consideration, the Trade Accounts Payable Adjustment Payment, theEuropean Trade Accounts Payable Adjustment Payment, the Shared Accounts PayableAdjustment Payment and the Accrued Payroll and Benefits Adjustment Paymentshall be paid as follows:

 

(i)            within five (5) Business Days after the date hereof,in accordance with the deposit agreement (the form of which is attached as Exhibit Ahereto, the “DepositAgreement”), the Purchaser will deliver to Wells Fargo Bank,National Association, as deposit agent (the “Deposit Agent”), five hundredthousand dollars (U.S. $500,000) (such amount, together with the interest andincome thereon, the “Deposit Amount”), to be held in an interest-bearingaccount by the Deposit Agent and to be distributed in accordance with the termsof the Deposit Agreement;

 

(ii)           at the Closing, the Purchaser shall pay, by wire transferof immediately available funds in U.S. dollars, the Initial Cash Consideration,plus fifty percent (50%) of the aggregate amount of the Trade AccountsPayable Adjustment Payment and the Shared Accounts Payable Adjustment Payment, plusthe Accrued Payroll and Benefits Adjustment Payment, plus any applicableTransfer Taxes imposed on, or required to be remitted by, the Seller or anyapplicable Subsidiary or Subsidiaries as a result of the transactions contemplatedhereby, less the Deposit Amount, to an account or accounts designated bythe Seller, such designation to be made in writing at least three (3) BusinessDays prior to the Closing Date;

 

(iii)          on the Business Day following the 15th day following theClosing Date, the Purchaser shall pay, by wire transfer of immediatelyavailable funds in U.S. 

 

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dollars, an amount equal tofifty percent (50%) of the European Trade Accounts Payable Adjustment Payment;and

 

(iv)          on the Business Day following the 30th day following theClosing Date, the Purchaser shall pay, by wire transfer of immediatelyavailable funds in U.S. dollars, an amount equal to fifty percent (50%) of theaggregate amount of the Trade Accounts Payable Adjustment Payment, the EuropeanTrade Accounts Payable Adjustment Payment and the Shared Accounts PayableAdjustment Payment.

 

Section 2.6             Post-ClosingClosing Net Working Capital Adjustment.

 

(a)           Withinninety (90) days after the Closing Date, the Seller will prepare and deliver tothe Purchaser a written notice (the “Adjustment Notice”) containing (i) theSeller’s calculation of the Closing Net Working Capital (the “Final ClosingNet Working Capital”) and (ii) the Seller’s calculation of the amountof any payments required pursuant to Section 2.6(h) (the “AdjustmentCalculation”).  The Final Closing NetWorking Capital and the Adjustment Calculation, if any, shall be set forth inU.S. dollars after any applicable portion thereof has been converted from eurosat the euro foreign exchange reference rate published in the Wall StreetJournal on the Closing Date.  TheAdjustment Notice will be prepared in accordance with the accounting methodsand practices set forth in Schedule 2.6(a) (the “CalculationPrinciples”).

 

(b)           Theparties agree that, for purposes of calculating the Final Closing Net WorkingCapital, the value of the Inventory shall be capped at an amount (the “InventoryCap”) equal to fifty million dollars ($50,000,000); provided, however, thatthe Seller and the Purchaser shall negotiate in good faith prior to Closing toseek to agree a methodology for adjusting the Inventory Cap upwards ordownwards, and to set forth such agreement on a Schedule 2.6(b), basedon fluctuations in the prices of (i) the metal tin, as quoted on theLondon Metal Exchange, (ii) soy bean oil, as quoted on the Chicago Boardof Trade, and (iii) Butadiene, as quoted from Chemical Market Associates, Inc.  If prior to Closing Seller determines in goodfaith that it is in the interest of the Business to pre-buy raw materials forthe manufacture of Inventory, Seller shall so notify Purchaser and Seller andPurchaser shall negotiate in good faith to increase the Inventory Cap as appropriate,to reflect the Closing Date impact of such pre-buy on the Closing DateInventory.  Any dispute relating to thenew Inventory Cap shall be resolved in accordance with Section 2.6(f).

 

(c)           Duringthe preparation of the Adjustment Notice, the Purchaser will, and will causeeach of its Affiliates to, (i) provide the Seller and the Seller’srepresentatives with full access to the books, records, facilities andemployees of the Business, (ii) provide the Seller, within thirty (30)days after the Closing Date, with normal month-end closing financialinformation for the period ending as of the close of business on the ClosingDate and (iii) reasonably cooperate with the Seller and the Seller’srepresentatives, including by providing on a timely basis all informationreasonably necessary or useful in preparing the Adjustment Notice.

 

(d)           Withinforty-five (45) days after delivery of the Adjustment Notice, the Purchaserwill either:

 

(i)            agree in writing with the Adjustment Calculation, inwhich case such calculation will be final and binding on the parties forpurposes of Section 2.6(h); or

 

(ii)           dispute the Adjustment Calculation by delivering to theSeller a written notice (a “Dispute Notice”) setting forth in reasonabledetail the basis for each such disputed item and certifying that all suchdisputed items are being disputed in good faith.

 

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During the review of theAdjustment Notice, the Seller will, and will cause each of its Affiliates to, (i) providethe Purchaser and the Purchaser’s representatives with full access to thesupporting documentation used to prepare the Adjustment Notice, and (ii) reasonablycooperate with the Purchaser and the Purchaser’s representatives, including byproviding on a timely basis all information reasonably necessary or useful inreviewing the Adjustment Notice.  Forpurposes of this Section 2.6(d), the Purchaser may not deliver aDispute Notice unless the aggregate value of all such disputed items exceedsfive hundred thousand dollars ($500,000).

 

(e)           Ifthe Purchaser fails to take either of the foregoing actions within forty-five(45) days after delivery of the Adjustment Notice, and the Seller and each ofits Affiliates have provided the Purchaser with all reasonably requestedsupporting documentation to review the Adjustment Notice within such forty-five(45) day period, then the Purchaser will be deemed to have irrevocably acceptedthe Adjustment Calculation, in which case, the Adjustment Calculation will befinal and binding on the parties for purposes of Section 2.6(h).

 

(f)            Ifthe Purchaser timely delivers a Dispute Notice to the Seller, then thePurchaser and the Seller will attempt in good faith, for a period of thirty(30) days, to agree on the Adjustment Calculation for purposes of Section 2.6(h).  Any resolution by the Purchaser and theSeller during such 30-day period as to any disputed items will be final andbinding on the parties for purposes of Section 2.6(h).  If the Purchaser and the Seller do notresolve all disputed items by the end of thirty (30) days after the date ofdelivery of the Dispute Notice, then the Purchaser and the Seller will submitthe remaining items in dispute to Ernst & Young, LLP for resolution,or if that firm is unwilling or unable to serve, the Purchaser and the Sellerwill engage another mutually agreeable independent accounting firm ofrecognized national standing, which firm is not the regular auditing firm ofthe Purchaser or the Seller.  If thePurchaser and the Seller are unable to jointly select such independentaccounting firm within ten (10) days after such 30-day period, thePurchaser, on the one hand, and the Seller, on the other hand, will each selectan independent accounting firm of recognized national standing and such selectedaccounting firms will select a third independent accounting firm of recognizednational standing, which firm is not the regular auditing firm of the Purchaseror the Seller; provided, however, that if either the Purchaser,on the one hand, or the Seller, on the other hand, fail to select suchindependent accounting firm during this 10-day period, then the parties agreethat the independent accounting firm selected by the other party will be theindependent accounting firm selected by the parties for purposes of this Section 2.6(such selected independent accounting firm, whether pursuant to this sentenceor the preceding sentence, the “Independent Accounting Firm”).  The Purchaser and the Seller will instructthe Independent Accounting Firm to render its determination with respect to theitems in dispute in a written report that specifies the conclusions of theIndependent Accounting Firm as to each item in dispute and the resultingAdjustment Calculation.  The Purchaserand the Seller will each use their commercially reasonable efforts to cause theIndependent Accounting Firm to render its determination within thirty (30) daysafter referral of the items to such firm or as soon thereafter as reasonablypracticable.  The Independent AccountingFirm’s determination of the Adjustment Calculation as set forth in its reportwill be final and binding on the parties for purposes of Section 2.6(h).  The Seller will revise the calculation of theFinal Closing Net Working Capital as appropriate to reflect the resolution ofthe items in dispute pursuant to this Section 2.6(f).  The fees and expenses of the IndependentAccounting Firm will be shared by the Purchaser and the Seller in inverseproportion to the relative amounts of the disputed amount determined to be forthe account of the Purchaser and the Seller, respectively.

 

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(g)           Forpurposes of complying with this Section 2.6, the Purchaser and theSeller (i) may mutually agree in writing to extend any time restrictionset forth herein in ten (10) day increments, (ii) will furnish toeach other and to the Independent Accounting Firm such work papers and otherdocuments and information relating to the disputed items as the IndependentAccounting Firm may request and are available to that party (or its independentpublic accountants) and (iii) will be afforded the opportunity to presentto the Independent Accounting Firm any material related to the disputed itemsand to discuss the items with the Independent Accounting Firm.

 

(h)           Ifthe Final Closing Net Working Capital as finally determined pursuant to this Section 2.6is less than Base Working Capital, then the Seller will pay to the Purchaserthe amount of such difference in cash plus interest thereon (calculated basedon the actual number of days elapsed in a year consisting of 365 days) from theClosing Date through and including the date of such payment at a rate of sixpercent (6%) per annum.  If the FinalClosing Net Working Capital as finally determined pursuant to this Section 2.6is greater than the Base Working Capital, then the Purchaser will pay to theSeller the amount of such difference in cash plus interest thereon (calculatedbased on the actual number of days elapsed in a year consisting of 365 days)from the Closing Date through and including the date of such payment at a rateof six percent (6%) per annum.  Forpurposes of clarity, a sample of the Final Closing Net Working Capital as of September 30,2009, as determined in accordance with the Calculation Principles, is set forthin Schedule 2.6(h).

 

(i)            Anypayment to the Purchaser pursuant to Section 2.6(h) will beeffected by wire transfer of immediately available funds from the Seller to anaccount designated by the Purchaser, and any payment to the Seller pursuant to Section 2.6(h) willbe effected by wire transfer of immediately available funds to an accountdesignated by the Seller.  Such paymentswill be made within five (5) Business Days following the finaldetermination of the Final Closing Net Working Capital in accordance with this Section 2.6.

 

(j)            Thepurpose of this Section 2.6 is to determine the final considerationto be paid by the Purchaser under this Agreement.  Any payment made pursuant to this Section 2.6will be treated by the parties for all purposes as an adjustment to theconsideration and will not be subject to offset for any reason.

 

Section 2.7             Allocation of Purchase Price.

 

(a)           At least twenty (20) Business Daysprior to the Closing, the Seller and the Purchaser shall have agreed toallocate the Initial Cash Consideration, the Trade Accounts Payable AdjustmentPayment, the European Trade Accounts Payable Adjustment Payment, the SharedAccounts Payable Adjustment Payment and the Accrued Payroll and BenefitsAdjustments Payment among the Shares on the one hand and the Purchased Assetson the other hand, and to set forth such allocation on a Schedule 2.7(a) (the“Initial Allocation Schedule”). The cash amounts allocated on Schedule 2.7(a) shall not beadjusted after the date thereof, except to take into account any adjustment tothe Initial Cash Consideration in accordance with this Agreement. Prior toClosing and consistently with Schedule 2.7(a), the Seller and thePurchaser shall in good faith agree how to allocate the Initial Consideration(taking into account Assumed Liabilities to the extent they are included in theamount realized for income tax purposes) among the Shares and the PurchasedAssets consistent with the principles set forth on Schedule 2.7(a), andsuch agreement shall be set forth on a schedule to be delivered at or prior toClosing (the “Closing Allocation Schedule”). The Purchaser shallinitially propose the content of the Closing Allocation Schedule and if thePurchaser does so, such proposal shall be subject to the Seller’s review andreasonable objection, to be resolved by good-faith negotiations

 

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between the Purchaser and the Seller. Except as otherwise required by Law or pursuant to a “determination”under Section 1313(a) of the Code (or any comparable provision ofstate, local or foreign Law), Purchaser and Seller agree to act, and to causetheir Affiliates to act, in accordance with the allocations contained in theClosing Allocation Schedule, for all Tax purposes and that neither of them will(or will permit its Affiliates to) take any position inconsistent therewith inany Tax Returns or similar filings (including IRS Form 8594 or any similarform required to be filed under state, local or foreign Law), any refund claim,litigation, audit or otherwise.  ThePurchaser and the Seller each agree to provide the other party with anyadditional information reasonably required to complete and file IRS Form 8594(or any similar form required to be filed under state, local or foreign Law)and with completed copies of such forms. Each party****will, subject to confidentiality obligations, provide to the other partya copy of any appraisal obtained by such party in connection with theallocation under this Section 2.7. Where a confidentialityobligation would otherwise prohibit a party from so providing a copy of anysuch appraisal, such party shall use its commercially reasonable efforts toobtain a waiver of such confidentiality obligations.

 

Section 2.8             Closing.   The closing of the transactions contemplatedby this Agreement (the “Closing”) will take place at the offices ofBaker & McKenzie LLP, 1114 Avenue of the Americas, New York, New York10036, at 10:00 a.m., local time, on the last Business Day of the calendarmonth in which the later of the following occurs: (i) thirty (30) BusinessDays following the approval of the Approval Order or (ii) the date inwhich the last of the conditions set forth in Article 6 has beensatisfied or waived (other than those conditions that by their nature can onlybe satisfied at the Closing), or at such other time and place as the Seller andthe Purchaser may agree in writing.  Thedate on which the Closing actually occurs is referred to in this Agreement asthe “Closing Date.”  For allpurposes under this Agreement and each of the Ancillary Agreements, all mattersat Closing will be considered to take place simultaneously, no delivery of anydocument will be deemed complete until all transactions and deliveries ofdocuments are completed, and the Closing will be deemed to have occurred at12:01 a.m., Eastern Standard Time, on the Closing Date irrespective of theactual occurrence of the Closing at any particular time on the Closing Date.

 

Section 2.9             Closing Deliveries.

 

(a)           Atthe Closing, the Seller will deliver or cause to be delivered to the Purchaser,for itself and as agent for the Designated Affiliates:

 

(i)            a bill of sale in the form of Exhibit B (the “Billof Sale”), duly executed by the Seller;

 

(ii)           an assignment and assumption agreement in the form of Exhibit C(the “Assignment and Assumption Agreement”), duly executed by theSeller;

 

(iii)          a share sale and transfer agreement in respect of theShares in the form of Exhibit D (the “Share Transfer Agreement”),duly executed and notarized by the Share Selling Affiliate;

 

(iv)          such deeds, documents, instruments andactions as are necessary or appropriate to effect the valid saleand transfer of  the Shares to the Purchaser or itsDesignated Affiliate, duly executed by the Share Selling Affiliate,and/or the managing director or the Acquired Company, as requiredpursuant to German Law;

 

(v)           assignments of all Purchased Intellectual Property in theforms of Exhibit E-1 and E-2 (collectively, the “IPAssignments”) and License of Shared Intellectual Property in the form of Exhibit E-3(the “IP License Agreement”), duly executed by the Seller;

 

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(vi)          for each parcel of Owned Real Property, a recordablewarranty deed or such other appropriate document or instrument of transfer inaccordance with local custom, each in form and substance reasonablysatisfactory to the Purchaser and its counsel and executed by the Seller;

 

(vii)         a certificate, dated as of the Closing Date, executed by theSeller confirming the satisfaction of the conditions specified in Section 6.1(a) and6.1(b);

 

(viii)        the resignations of the managingdirectors of the Acquired Company set forth on Schedule 2.9(a)(viii), tothe extent that such resignations have been requested in writing by thePurchaser not less than two (2) Business Days prior to Closing;

 

(ix)           a transition services agreement in the form of Exhibit F(the “Transition Services Agreement”), duly executed by the Seller;

 

(x)            a supply agreement in the form of Exhibit G(the “TBT Supply Agreement”), duly executed by the Seller;

 

(xi)           a supply agreement in the form of Exhibit H(the “TOT Supply Agreement”), duly executed by the Seller;

 

(xii)          a supply agreement in the form of Exhibit I(the “TPP/LPE Supply Agreement”), duly executed by the Seller;

 

(xiii)         an assignment of the environmentalindemnity from Ciba contained in the Ciba Basic Agreement in the form of Exhibit J(the “Ciba Environmental Indemnity Assignment”);

 

(xiv)        a copy of the Approval Order; and

 

(xv)         evidence that notice of termination of the Acquired Company’sparticipation in the domination and profit and loss pooling agreements has beenmade in accordance with German Law.

 

(b)           Atthe Closing, the Purchaser will, for itself and as agent for its DesignatedAffiliate, deliver or cause to be delivered to the Seller, for itself and asagent for the Share Selling Affiliate:

 

(i)            the Initial Cash Consideration, fifty percent (50%) ofthe aggregate amount of the Trade Accounts Payable Adjustment Payment and theShared Accounts Payable Adjustment Payment, and the Accrued Payroll andBenefits Adjustment Payment by wire transfer of immediately available funds inU.S. dollars in the amount and manner specified in Section 2.5(b);

 

(ii)           the Assignment and Assumption Agreement, duly executed bythe Purchaser;

 

(iii)          the Bill of Sale, duly executed by the Purchaser;

 

(iv)          the Share Transfer Agreement, duly executed and notarizedby the Purchaser or its Designated Affiliate, as applicable;

 

(v)           the IP Assignments, if any, that call for a signature bythe Purchaser and/or its Designated Affiliates, duly executed by the Purchaserand/or such Designated Affiliates, as applicable, and the IP License Agreement,duly executed by the Purchaser;

 

(vi)          a certificate, dated as of the Closing Date, duly executedby the Purchaser confirming the satisfaction of the conditions specified in Sections6.2(a) and 6.2(b);

 

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(vii)         the Transition Services Agreement, duly executed by the Purchaser;

 

(viii)        the TBT Supply Agreement, duly executedby the Purchaser;

 

(ix)           the TOT Supply Agreement, duly executed by the Purchaser;

 

(x)            the TPP/LPE Supply Agreement, duly executed by thePurchaser; and

 

(xi)           the Ciba Environmental Indemnity Assignment, duly executedby the Acquired Company.

 

Section 2.10           Certain Foreign Purchased Assets.

 

(a)           TheSeller shall cause all Purchased Assets currently located in Europe and Asia(other than Included Contracts with any Seller Affiliate other than the Seller,which shall be assigned directly to the Purchaser  at Closing ) (the “Other Purchased Assets”)to be transferred to the Acquired Company prior to the Closing.

 

(b)           TheSeller shall cause the book value of the Other Purchased Assets in the booksand records of the Acquired Company immediately after the transfer pursuant to Section 2.10(a) aboveto be equal to the book value of the Other Purchased Assets as set forth in thebooks and records of the relevant Seller Affiliates immediately prior to suchtransfer.

 

(c)           Tothe extent that any VAT is payable by the Acquired Company in respect of thetransfers to it of the Other Purchased Assets prior to Closing, the Sellershall cause the Acquired Company to pay such VAT upon transfer to the relevantGovernmental Authority or the relevant transferor Seller Affiliate for paymentto the relevant Government Authority, and the Seller shall thereupon pay orcause to be paid to the Acquired Company at or prior to Closing an amount equalto the aggregate amount of all such VAT payments made by the Acquired Company.Following Closing, the Purchaser shall cause the Acquired Company to reimburseto the Seller, or as the Seller may direct in writing, an amount equal to suchVAT payments within five (5) Business Days after the receipt by theAcquired Company of credit or repayment from the applicable GovernmentalAuthority in respect of the relevant VAT.

 

(d)           AllPurchased Assets currently located in Latin America (the “Latin AmericanPurchased Assets”) shall be sold by the Seller or a Seller Affiliate to thePurchaser, except that if the Purchaser instead requests in writing that suchLatin American Purchased Assets be assigned to a Purchaser Affiliate, theSeller shall transfer such assets to such Purchaser Affiliate at the Closing oras soon as practicable thereafter. The Purchaser shall take such steps as arenecessary to be able to, or to cause a Purchaser Affiliate to be able to, taketitle to the Latin American Purchased Assets at, or as soon as practicableafter, Closing. The parties acknowledge and agree that (i) transfer oftitle to the Latin American Purchased Assets may not, for reasons of local Lawand regulation, occur at the Closing, (ii) any such delay will not affectthe Initial Consideration payable at Closing, and (iii) the parties willtake such steps as are necessary to transfer title to the Latin AmericanPurchased Assets, to the extent the same is not transferred at Closing, to thePurchaser or its designated Affiliate as soon as practicable after Closing.

 

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**ARTICLE3**

**REPRESENTATIONSAND WARRANTIES OF THE SELLER**

 

TheSeller represents and warrants to the Purchaser as follows, except as set forthon the disclosure schedule delivered by the Seller to the Purchaser concurrentlywith the execution and delivery of this Agreement and dated as of the date ofthis Agreement (the “Seller Disclosure Schedule”):

 

Section 3.1             Organization and Good Standing.  Each of the Seller and the Acquired Companyis a corporation duly organized, validly existing and in good standing (to theextent such concept is applicable in the relevant jurisdiction) under the Lawsof the jurisdiction of its organization, and has all requisite corporate powerand authority to conduct its business as presently conducted.

 

Section 3.2             Authority and Enforceability.

 

(a)           Uponentry of the Approval Order and subject to it becoming a Final Order, theSeller will have all requisite corporate power and authority to execute anddeliver this Agreement and to perform its obligations under thisAgreement.  The execution, delivery andperformance of this Agreement and the consummation of the transactionscontemplated by this Agreement by the Seller have been duly authorized by allnecessary corporate action on the part of the Seller.  Upon entry of the Approval Order and subjectto it becoming a Final Order, and assuming the due authorization, execution anddelivery of this Agreement by the Purchaser, this Agreement will constitute thevalid and binding obligation of the Seller, enforceable against the Seller inaccordance with its terms, subject to (i) Laws of general applicationrelating to bankruptcy, insolvency and the relief of debtors and (ii) Lawsgoverning specific performance, injunctive relief and other equitable remedies.

 

(b)           Subjectto the entry of the Approval Order and such other authorization as may berequired by the Bankruptcy Court and assuming the due authorization, executionand delivery of the Ancillary Agreements by the Purchaser and/or the DesignatedAffiliates and the other parties thereto, (i) the execution, delivery andperformance of each Ancillary Agreement and the consummation of thetransactions contemplated thereby by the Seller and the Share Selling Affiliateparty thereto have been duly authorized by all necessary corporate action onthe part of the Seller and the Share Selling Affiliate and (ii) and at theClosing each Ancillary Agreement to which the Seller or the Share SellingAffiliate is a party will constitute the valid and binding obligation of theSeller or the Share Selling Affiliate that is party thereto, enforceableagainst the Seller or the Share Selling Affiliate in accordance with its terms,subject to (A) Laws of general application relating to bankruptcy,insolvency and the relief of debtors and (B) Laws governing specificperformance, injunctive relief and other equitable remedies.

 

Section 3.3             No Conflict.  Except as set forth on Section 3.3of the Seller Disclosure Schedule and subject to entry of the Approval Order,except for the requirements of applicable Antitrust Law, neither the execution,delivery and performance of this Agreement by the Seller and any AncillaryAgreement by the Seller or the Share Selling Affiliate party thereto, nor theconsummation by the Seller of the transactions contemplated by this Agreement,will (a) conflict with or violate the certificate of incorporation orbylaws or other applicable charter or organizational documents of the Seller,the Share Selling Affiliate or the Acquired Company, (b) result in abreach or default under, or create in any Person the right to terminate,cancel, accelerate or modify, or require any notice, consent or waiver under,any Material Contract, (c) violate any Law or Judgment applicable to theSeller, the Share Selling Affiliate or the Acquired

 

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Company (to the extent itrelates exclusively to the Business), the Business or the Purchased Assets, (d) requirethe Seller, the Share Selling Affiliate or the Acquired Company to obtain anyGovernmental Authorization or make any filing with any Governmental Authority,or (e) result in the creation of an Encumbrance on any of the PurchasedAssets.

 

Section 3.4             Capitalization and Ownership.

 

(a)           Section 3.4(a) ofthe Seller Disclosure Schedule sets forth an accurate and complete list of allthe issued and outstanding shares of the capital stock of the Acquired Company.Section 3.4(a) of the Seller Disclosure Schedule includes anup-to-date excerpt from the commercial register and no material filings to thecommercial register have been made, or should have been made, that have notbeen registered. The Shares represent all of the issued and outstanding sharesof the capital stock of the Acquired Company. The Share Selling Affiliate is the sole record holder and beneficialowner of all of the Shares, free and clear of all Encumbrances, in therespective amounts set forth in Section 3.4(a) of the SellerDisclosure Schedule.  Upon payment infull of the Purchase Price, good and valid title to the Shares will pass to thePurchaser (or its Designated Affiliate), free and clear of any Encumbrances,and with no restrictions on the voting rights or other incidents of record andbeneficial ownership of such Shares.  Allof the Shares are duly authorized, validly issued, fully paid andnonassessable.  There are no Contracts towhich the Share Selling Affiliate or any other Person, is a party or bound withrespect to the voting (including voting trusts or proxies) of the Shares.  Other than the Shares, there are nooutstanding or authorized options, warrants, rights, agreements or commitmentsto which the Acquired Company is a party or which are binding upon the AcquiredCompany providing for the issuance or redemption of any shares of the AcquiredCompany’s capital stock.

 

(b)           TheAcquired Company does not own or have any rights to acquire, directly orindirectly, any capital stock or other equity interests of any Person.

 

(c)           Nobankruptcy, insolvency or dissolution proceedings are applied for, pending or,to the Seller’s Knowledge, threatened with respect to the Acquired Company orthe Share Selling Affiliate. Neither the Acquired Company nor the Share SellingAffiliate is required under the Laws of its jurisdiction of organization to filefor bankruptcy, insolvency or dissolution.

 

Section 3.5             Financial Statements.  The Seller hasmade available to the Purchaser copies of the unaudited pro forma statement ofnet assets and liabilities (the “September ‘09 Net Assets Statement”)of the Business as at September 30, 2009 and the unaudited pro formaconsolidated statement of income (the “Income Statement”, together withthe September ‘09 Net Assets Statement, the “Financial Statements”)of the Business for the period ended September 30, 2009, in each caseprepared in accordance with GAAP as set forth in Section 3.5 of theSeller Disclosure Schedule and consistent with the CalculationPrinciples.  The Financial Statements were prepared based on the Seller’snormal quarter end closing procedures, which are consistent in all materialrespects with normal year end closing procedures, other than preparation offootnotes.  The Financial Statements (i) wereprepared in accordance with GAAP from the books and records of the Seller andBusiness and (ii) fairly present, in all material respects, the assets tobe sold, the liabilities to be assumed and the revenues and direct expenses ofthe Business as of the dates and for the periods indicated herein, except asotherwise indicated in the Financial Statements and CalculationPrinciples.  Notwithstanding any reference in the Financial Statements tothe inclusion of certain assets to be sold and liabilities to be transferred,the only assets to be sold are the Purchased Assets and the Shares and only theliabilities to be assumed by the Purchaser are the Assumed Liabilities.

 

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There are no material knownliabilities, whether actual or contingent, arising out of the Business otherthan (i) future obligations under the Included Contracts, (ii) liabilitiesset forth on the Financial Statements or incurred in the ordinary course of theBusiness since September 30, 2009, (iii) liabilities listed on Section 3.5of the Seller Disclosure, and (iv) liabilities that, individually or inthe aggregate, do not have a Material Adverse Effect.

 

Section 3.6             Operation of the Business.  Except as set forth on Section 3.6of the Seller Disclosure Schedule, the Seller has conducted the Business onlythrough the Seller and the Acquired Company and not through any Subsidiary orAffiliate (other than the Acquired Company) of the Seller and no part of theBusiness is operated by the Seller through any Person other than the Seller andthe Acquired Company. Since the date of the Financial Statements, the Sellerhas operated only in ordinary course of business (other than as impacted by theBankruptcy) and has not disposed of any material assets set forth in theFinancial Statements other than sales of inventory in ordinary course of the Business.

 

Section 3.7             Absence of Certain Changes andEvents.  From the date of theFinancial Statements to the date of this Agreement, there has not been anyMaterial Adverse Effect.  Withoutlimiting the generality of the foregoing, since the date of the FinancialStatements, there has not been any:

 

(a)           amendmentor authorization of any amendment to the articles of incorporation or bylaws orother applicable charter or organizational documents of the Seller or theAcquired Company in a manner that could be expected to delay or otherwiseinterfere with the consummation of the transactions contemplated by thisAgreement;

 

(b)           declaration,setting aside or payment of any dividend or other distribution (other than incash) in respect of the capital stock of the Acquired Company;

 

(c)           exceptas set forth on Section 3.7(c) of the Seller DisclosureSchedule, sale, lease, license, pledge or other disposition of, or Encumbranceon, any of the properties or assets of the Acquired Company or the Seller usedor held for use in connection with, necessary for or relating to the Business(other than sales of inventory for fair consideration and in the ordinarycourse of the Business);

 

(d)           acquisitionof any properties or assets that arematerial to the Business individually or in the aggregate, exceptpurchases of inventory for fair consideration and in the ordinary course of theBusiness;

 

(e)           damage to, or destruction orloss of, any of the properties or assets of the Acquired Company or of theSeller used or held for use in connection with, necessary for or relating tothe Business with an aggregate value in excess of two hundred and fiftythousand ($250,000), whether or not covered by insurance;

 

(f)            settlementor compromise with a value in excess of one hundred thousand ($100,000) inconnection with any Proceeding involving the Seller and the Acquired Companyand arising in connection with the operation of the Business or otherwiserelating to the Business, the Purchased Assets or the Assumed Liabilities;

 

(g)           exceptas set forth on Section 3.7(g) of the Seller DisclosureSchedule, rejection, termination, expiration or adverse amendment to anyMaterial Contract,

 

(h)           exceptas set forth on Section 3.7(h) of the Seller DisclosureSchedule, capital expenditure or other expenditure with respect to property,plant or equipment used in or held for use in connection with, necessary for orrelating to the Business in excess of two hundred and fifty thousand ($250,000)individually or one million ($1,000,000) in the aggregate;

 

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(i)            changein the Seller’s accounting principles, methods or practices or investmentpractices in connection with or relating to the Business, including any changesas were necessary to conform with GAAP;

 

(j)            material acceleration or delay in thepayment of accounts payable or other Liabilities or in the collection of notesor accounts receivable in connection with or relating to the Business; or

 

(k)           agreementby the Seller, whether in writing or otherwise, to do any of the foregoing.

 

Section 3.8             Personal Property.

 

(a)           Aftergiving effect to the entry of the Approval Order and subject to it becoming aFinal Order, the Seller has good and marketable title to, or in the case ofleased assets, valid leasehold interests in, all of the tangible personalproperty included in the Purchased Assets, and the Acquired Company has goodand marketable title to, or in the case of leased assets, valid leaseholdinterests in, all of their tangible personal property, free and clear of allEncumbrances.

 

(b)           Exceptas set forth on Section 3.8 of the Seller Disclosure Schedule, thePurchased Assets and the assets of the Acquired Company, taken as a whole,constitute all of the assets used exclusively in the Business and constituteall of the assets that are necessary to conduct the Business as conductedimmediately prior to Closing (except assets sold, cash disposed of, accountsreceivable collected, prepaid expenses realized, Contracts fully performed,properties or assets replaced by equivalent or superior properties or assets,in each case in the ordinary course of the Business, employees not to be hiredby the Purchaser, the Excluded Assets and any assets to be made available underthe Transition Services Agreement).

 

(c)           Eachtangible asset included in the Purchased Assets is in all material respects insatisfactory operating condition and repair, ordinary wear and tear excepted,is suitable for the purposes for which it is being used by the Seller or theAcquired Company and has been maintained in accordance with normal industrypractice.

 

Section 3.9             Real Property.

 

(a)           Section 3.9(a) ofthe Seller Disclosure Schedule sets forth an accurate and complete list (bystreet address and current owner) (i) of all real property in which theAcquired Company has fee title (or equivalent) interest (collectively, the “AcquiredCompany Real Property”) and (ii) of all Owned Real Property.  Section 3.9(a) of the SellerDisclosure Schedule includes up-to-date excerpts from the land register foreach parcel of the Acquired Company Real Property.  After giving effect to the entry of theApproval Order and subject to it becoming a Final Order, the current owner hasgood and marketable title in fee simple to each parcel of Acquired Company RealProperty and each parcel of Owned Real Property, free and clear of anyEncumbrance.

 

(b)           TheSeller has no leasehold interest in any real property related to theBusiness.  Section 3.9(b) ofthe Seller Disclosure Schedule sets forth an accurate and complete description(by street address of the subject leased real property, the date and term ofthe lease, the name of the parties thereto and the aggregate annual rentpayable thereunder) (i) of all real property that is leased by theAcquired Company (collectively, the “Acquired Company Leased Real Property”).  The Acquired Company holds valid leaseholdinterests in the Acquired Company Leased Real Property, free and clear of anyEncumbrances.  The Seller has madeavailable to the Purchaser complete copies of the

 

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leases,together with any amendments thereto, in effect as of the date hereof relatingto the Acquired Company Leased Real Property (collectively, the “Leases”and each a “Lease”) and there has not been any sublease or assignmententered into by the Acquired Company in respect of the Leases.  Each Lease is enforceable as to the AcquiredCompany and, to the Seller’s Knowledge, the other party thereto, in accordancewith its terms except to the extent it has previously expired in accordancewith its terms and subject to (i) Laws of general application relating tobankruptcy, insolvency and the relief of debtors, and (ii) rules ofLaw governing specific performance, injunctive relief and other equitableremedies.  All material obligations andconditions under the Leases to be performed to date by the Acquired Companyand, to the Seller’s Knowledge, the landlords thereunder have been satisfied.

 

(c)           Exceptas set forth on Section 3.9(c) of the Seller DisclosureSchedule, the Seller and the Acquired Company are in peaceful and undisturbedpossession of the Real Property, and there are no contractual or legalrestrictions or other Encumbrances that preclude or restrict the ability of theSeller and the Acquired Company to use the Real Property for the purposes for whichit is currently being used or in order to affect the transactions contemplatedby this Agreement.  Neither the Sellernor the Acquired Company has subleased, licensed or otherwise granted to anyPerson the right to use or occupy any portion of the Real Property, and neitherthe Seller nor the Acquired Company has received notice, of any claim of anyPerson to the contrary.

 

(d)           Useof the Real Property for the various purposes for which it is presently beingused is permitted as of right under applicable zoning Laws and is not subjectto “permitted non-conforming” use or structure classifications.  The Real Property is supplied with utilitiesand other services necessary for the operation of the Business and each parcelof Real Property abuts on and has direct vehicular access to an improved publicroad or access to an improved public road via a permanent, irrevocableappurtenant easement improved with a road benefiting the parcel of RealProperty.

 

Section 3.10           Intellectual Property.  Section 3.10 of the SellerDisclosure Schedule sets forth all registered Purchased Intellectual Property(including registration applications) that the Seller owns or otherwise has theright to use in its operation of the Business and all registered IntellectualProperty that the Acquired Company owns or otherwise has the right to use inits operation of the Business as presently conducted (together with allunregistered Intellectual Property that the Acquired Company owns or otherwisehas the right to use in its operation of the Business as presently conducted,the “Acquired Company Intellectual Property” and together with thePurchased Intellectual Property, the “Business Intellectual Property Rights”).  To the Seller’s Knowledge, none of theactivities or business presently conducted by the Business infringes orviolates, or constitutes a misappropriation of, any Intellectual Propertyrights of any Person.  The BusinessIntellectual Property Rights are not subject to any Encumbrance (other than anEncumbrance that will be removed and stricken as against the Purchased Assetspursuant to the Approval Order), and are not subject to any restrictions orlimitations regarding use or disclosure other than pursuant to a writtenlicense agreement set forth on Section 3.10 of the SellerDisclosure Schedule.  Since the date ofthe Financial Statements, neither the Seller nor the Acquired Company hasreceived written notification from any third party alleging that the Seller orAcquired Company infringes any Intellectual Property of such third party. Tothe Knowledge of Seller, no third party is infringing, misappropriating orotherwise conflicting with any of the Business Intellectual Property Rights. Nocompensation claims under any employee invention Laws are pending or, to theSeller’s Knowledge, threatened in respect of the Business Intellectual PropertyRights.

 

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Section 3.11           Contracts.

 

(a)           Section 3.11(a) ofthe Seller Disclosure Schedule sets forth an accurate and complete list as ofthe date hereof of each written Included Contract to which the Seller is aparty and each written Contract to which the Acquired Company is a party,which:

 

(i)            is for the purchase or sale of materials, supplies,goods, equipment or services that involves the payment by or to the Seller orthe Acquired Company of more than two hundred and fifty thousand ($250,000)over the life of the Contract;

 

(ii)           is for capital expenditures in excess of one hundredthousand ($100,000);

 

(iii)          is a mortgage, indenture, guarantee, loan or creditagreement, security agreement or other Contract relating to indebtedness forborrowed money, other than accounts receivables and payables in the ordinarycourse of the Business, and in each case having an outstanding principal amountin excess of one hundred thousand ($100,000);

 

(iv)          is a material license or other material Contract underwhich the Seller or the Acquired Company has obtained a license to use theIntellectual Property of another Person (except for any license implied by thesale of a product and perpetual, paid-up licenses for commonly availablesoftware programs with a value of less than fifty thousand ($50,000) underwhich the Seller or the Acquired Company is the licensee);

 

(v)           is a material employment Contract that is not terminableby the Seller or the Acquired Company without penalty or further payment andwithout more than sixty (60) days’ notice;

 

(vi)          is a material contract that provides for the Seller or theAcquired Company to act as a distributor, dealer, sales representative orauthorized service Person;

 

(vii)         is a material Contract that limits or purports to limit theability of the Business or the Acquired Company to compete in any line ofbusiness or with any Person or in any geographic area;

 

(viii)        is a material Contract between or amongthe Business (as conducted through the Seller or the Acquired Company, asapplicable), on the one hand, and the Seller or the Acquired Company or theirrespective Affiliates, on the other hand; or

 

(ix)           is entered into with a Governmental Authority.

 

TheContracts listed in Section 3.11(a) of the Seller DisclosureSchedule are referred to in this Agreement as the “Material Contracts.”

 

(b)           TheSeller has made available to the Purchaser an accurate and complete copy ofeach Material Contract.  With respect toeach such Material Contract, neither the Seller nor the Acquired Company partyto the Material Contract, nor, to the Seller’s Knowledge, any other party tothe Material Contract is in material breach or material default under theMaterial Contract.  Each MaterialContract is enforceable as to the Seller or the Acquired Company party theretoand, to the Seller’s Knowledge, the other party thereto, in accordance with itsterms except to the extent it has previously expired in accordance with itsterms and subject to (i) Laws of general application relating tobankruptcy, insolvency and the relief of debtors, and (ii) rules ofLaw governing specific performance, injunctive relief and other equitableremedies.

 

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(c)           Section 3.11(c) ofthe Seller Disclosure Schedule sets forth a list of Contracts with thirdparties relating to the Business which are not Included Contracts because theyare shared with other Seller operations, but would have otherwise beenconsidered Material Contracts pursuant to Section 3.11(a).

 

(d)           Section 3.11(d) ofthe Seller Disclosure Schedule identifies which Material Contracts requirethird party consent to assign in accordance with their terms, subject to theprovisions of the Bankruptcy Code in respect thereof or, with respect toMaterial Contracts involving the Acquired Company, require third party consentin connection with a stock transfer or other change of control.

 

Section 3.12           Tax Matters.

 

(a)           Allmaterial Tax Returns required to be filed by the Seller with respect to thePurchased Assets or by the Acquired Company have been timely filed and all suchTax Returns are true, complete and accurate in all material respects.  All material Taxes due and payable by theSeller with respect to the Purchased Assets, or by the Acquired Company whetheror not shown on such Tax Returns, have been paid, except for any payments bythe Seller which have been stayed by the filing of the Case under Section 362of the Bankruptcy Code.  No GovernmentalAuthority has proposed formally in writing to make or has made any materialadjustment with respect to Taxes primarily attributable to the Purchased Assetsor such Tax Returns of the Acquired Company. The Acquired Company does not have any Liability for any Tax obligationof any other taxpayer, including any obligation under any Tax sharingagreement.  The Seller has made availableto the Purchaser accurate and complete copies of all Tax Returns filed by theSeller with respect to the Purchased Assets and all Tax Returns filed by theAcquired Company for the years ended December 31, 2006, 2007 and 2008,respectively.

 

(b)           Allmaterial Taxes that the Acquired Company is required by Law to withhold orcollect, and all material Taxes that the Seller is required by Law to withholdor collect in respect of Taxes primarily relating to the Purchased Assets, havebeen properly withheld or collected, and, to the extent required by applicableLaw, have been paid over to the proper Governmental Authority.

 

(c)           Noaudits or other Proceedings are pending or being conducted, nor has the Selleror the Acquired Company received any written notice from any GovernmentalAuthority that any such audit or other Proceeding is pending or, to the Seller’sKnowledge, threatened in any case with respect to Taxes attributable to thePurchased Assets or the Acquired Company. Neither the Seller nor the Acquired Company has waived any statute oflimitations with respect to Taxes or agreed to an extension of time withrespect to a Tax assessment or deficiency in any case with respect to Taxesattributable to the Purchased Assets or the Acquired Company, which waiver orextension of time is currently outstanding.

 

(d)           TheAcquired Company (i) is a disregarded entity for U.S. federal income Taxpurposes, (ii) is not, and has never been, a passive foreign investmentcompany within the meaning of Section 1296 of the Code, and (iii) isnot, and has never been, engaged in the conduct of a trade or business withinthe United States within the meaning of Section 864(b) of the Code.

 

(e)           ThisSection 3.12 constitutes the sole and exclusive representations andwarranties of the Seller with respect to any matters relating to Taxes.

 

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Section 3.13           Employee Benefit Matters.

 

(a)           Section 3.13(a) ofthe Seller Disclosure Schedule sets forth an accurate and complete list of allSeller Plans.

 

(b)           TheSeller has made available to the Purchaser an accurate written summary of eachSeller Plan.

 

(c)           NoProceeding with respect to the administration or the investment of the assetsof any Seller Plan (other than routine claims for benefits) is pending or, theSeller’s Knowledge, threatened.  Allcontributions, including all social security contributions, required to be madeby the Seller or the Acquired Company to each Seller Plan under the terms ofsuch Seller Plan or applicable Law have been timely made.  Each Seller Plan materially complies and isoperated in accordance with the requirements of applicable Law.

 

(d)           Section 3.13(d) ofthe Seller Disclosure Schedule sets forth an accurate and complete list of: (i) anyemployment, severance and change of control agreement with any executiveofficer or other senior managerial employee of the Acquired Company (A) thebenefits of which are contingent upon the occurrence of a transaction involvingthe Acquired Company of the nature of the transactions contemplated by thisAgreement (either alone or upon termination of employment following suchtransactions), or (B) providing any guarantee of employment orcompensation; and (ii) any agreement or plan binding upon the AcquiredCompany, including, any Seller Plan, any of the benefits of which will beincreased, or the vesting of the benefits of which will be accelerated, by theconsummation of the transactions contemplated by this Agreement (either aloneor upon the termination of employment following such transactions).

 

(e)           EachSeller Plan that intended to be tax-qualified under Code Section 401(a) hasreceived a favorable determination or opinion letter from the IRS that it isqualified under Code Section 401(a)  and that its related trust isexempt from federal income Tax under Section 501(a) of the Code.  To Seller’s Knowledge, no event has occurredor circumstance exists that could reasonably be expected to give rise todisqualification or loss of Tax-exempt status of any such Seller Plan or trust.

 

(f)            Withrespect to the Chemtura Corporation Retirement Plan, the Seller has madeavailable to the Purchaser correct and complete copies of the two (2) mostrecent annual valuations as certified by Seller’s actuaries and the certifiedfinancial audit prepared for the most recently filed Form 5500 annualreturn/report by the auditors of such plan.

 

(g)           ThisSection 3.13 constitutes the sole and exclusive representations andwarranties of the Seller with respect to any matters relating to employeebenefits.

 

Section 3.14           Employment and Labor Matters.

 

(a)           Section 3.14(a) ofthe Seller Disclosure Schedule sets forth an accurate and complete list of allEmployees and Acquired Company Employees as of the date of this Agreement,along with the position of such Persons.

 

(b)           Exceptas set forth on Section 3.14(b) of the Seller DisclosureSchedule, neither the Seller nor the Acquired Company is a party to or bound byany collective bargaining agreement applicable to, and, to the Seller’sKnowledge, no petition has been filed or Proceedings instituted by, anyEmployee or Acquired Company Employee or group of Employees or Acquired CompanyEmployees with any labor relations board seeking recognition of a bargainingrepresentative.  The Acquired Company hasa works 

 

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council. There is no organizational effort currently being made or, tothe Seller’s Knowledge, threatened by or on behalf of any labor union toorganize any Employees or Acquired Company Employees.  There is no labor strike, picketing,slowdown, lockout, employee grievance process or other work stoppage orlabor dispute pending or, to the Seller’s Knowledge, threatened between theSeller or the Acquired Company, on the one hand, and any of its Employees orAcquired Company Employees, on the other hand, except for such disputes withindividual Employees or Acquired Company Employees arising in the ordinarycourse of the Business.  The Seller andthe Acquired Company are in compliance with all applicable Laws pertaining tothe employment of their Employees and Acquired Company Employees, including allsuch Laws relating to fair employment practices, equal employmentopportunities, prohibited discrimination and other similar employmentactivities, except where the failure to so comply would not have a MaterialAdverse Effect.

 

(c)           Thereis no Proceeding pending or, to the Seller’s Knowledge, threatened against oraffecting the Seller or the Acquired Company relating to the alleged violationby the  Seller or the Acquired Company(or their directors or officers) of any Law pertaining to labor relations oremployment matters in connection with the Business.  There has within the two (2) years priorto the date of this Agreement been no complaint, claim or charge ofdiscrimination filed or, to the Seller’s Knowledge, threatened, against any memberof the Seller Group with the Equal Employment Opportunity Commission or anyother Governmental Authority in connection with the Business.

 

(d)           SinceDecember 31, 2008, the Seller has not implemented any plant closing orlayoff of employees in connection with the Business that could implicate theWARN Act or similar legislation in other jurisdictions of the Business.

 

(e)           Exceptas set forth on Section 3.14(e) of the Seller DisclosureSchedule, all the Employees of the Business are employees “at-will” and noEmployee is employed pursuant to a written employment agreement.

 

(f)            ThisSection 3.14 constitutes the sole and exclusive representations andwarranties of the Seller with respect to any matters relating to employment andlabor matters.

 

Section 3.15           Environmental, Health and SafetyMatters.

 

(a)           Withrespect to the Business, the Purchased Assets and the Owned Real Property,except as set forth on Section 3.15(a) of the SellerDisclosure Schedule: (i) to the Seller’s Knowledge, the Seller is in materialcompliance with all applicable Environmental Laws and all GovernmentalAuthorizations required of the Seller under Environmental Laws (“EnvironmentalAuthorizations”) to conduct the Business as presently conducted includingthe obligations imposed on the Business under Regulation (EC) 1907/2006governing the registration of chemicals in the European Union; (ii) theSeller has not received any written notice stating that the conduct of theBusiness or the condition of any Owned Real Property or Purchased Assets is ormay be currently in violation of any Environmental Law or that Seller may havea liability under Environmental Laws with respect to the Business, thePurchased Assets, or the Owned Real Property; (iii) no Proceeding ispending or, to the Seller’s Knowledge, threatened against the Seller thatalleges a violation by or Liability of the Seller under any applicableEnvironmental Laws or Environmental Authorizations; (iv) to the Seller’s Knowledge, there have been noReleases at, to, from, in, on, to or under the Purchased Assets or Owned RealProperty in violation of Environmental Laws or Environmental Authorizations orthat could reasonably be expected to result in Liability under EnvironmentalLaws; (v) the Seller holds all Environmental

 

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Authorizations required to be held by the Seller in connection with theBusiness, the Purchased Assets and the Owned Real Property; and (vi) Section 3.15(a)(vi) ofthe Seller Disclosure Schedule sets forth an accurate and complete list of allEnvironmental Authorizations held by the Seller in connection with theBusiness, the Purchased Assets and the Owned Real Property.

 

(b)           Exceptas set forth on Section 3.15(b) of the Seller DisclosureSchedule: (i) to the Seller’s Knowledge, the Acquired Company is inmaterial compliance with all applicable Environmental Laws and allEnvironmental Authorizations; (ii) neither the Seller nor the AcquiredCompany has received any written notice stating that the Acquired Company is ormay be currently in violation of or have a Liability under any EnvironmentalLaw; (iii) no Proceeding is pending or, to the Seller’s Knowledge or theKnowledge of the Acquired Company, threatened against the Acquired Company thatalleges a violation by or Liability of the Acquired Company under anyapplicable Environmental Laws or Environmental Authorizations; (iv) to the Seller’s Knowledge or the Knowledge ofthe Acquired Company, there have been no Releases at, to, from, in, on, to orunder the Acquired Company Real Property or Acquired Company Leased Property inviolation of Environmental Laws or Environmental Authorizations or that couldreasonably be expected to result in Liability under Environmental Laws; (v) theAcquired Company holds all Environmental Authorizations required to be held bythe Acquired Company; and (vi) Section 3.15(b)(vi) of theSeller Disclosure Schedule sets forth an accurate and complete list of allEnvironmental Authorizations held by the Acquired Company.

 

(c)           ThisSection 3.15 constitutes the sole and exclusive representations andwarranties of the Seller with respect to any matters relating to EnvironmentalLaws.

 

Section 3.16           Governmental Authorizations.   The Seller and the Acquired Company have allmaterial Governmental Authorizations that are necessary for them to conduct theBusiness in the manner in which it is presently conducted.  The Seller and the Acquired Company are incompliance in all material respects with all material GovernmentalAuthorizations that are necessary for them to conduct the Business in themanner in which it is presently conducted. The Seller and the Acquired Company have not received any public grantsor subsidies from any Governmental Authority, and there are no public grants orsubsidies that are repayable by the Acquired Company to any GovernmentalAuthority.

 

Section 3.17           Compliance with Laws.

 

(a)           Except as set forth on Section 3.17(a) ofthe Seller Disclosure Schedule, the Seller and the Acquired Company, and theconduct of the Business by the Seller and the Acquired Company, are in materialcompliance with all Laws applicable to the conduct of the Business or theownership or use of the Purchased Assets or the assets of the Acquired Company.Neither the Seller nor the Acquired Company has received at any time since December 31,2006 any notice or other communication from any Governmental Authority or anyother Person regarding any actual, alleged or potential violation of, orfailure to comply with, any applicable Law, Judgment or GovernmentalAuthorization, or any actual or threatened revocation, withdrawal, suspension,cancellation, termination or modification of any Governmental Authorization inconnection with the conduct of the Business or the ownership or use of any ofits properties or assets used or held for use in connection with, necessary foror relating to the Business.

 

(b)           Section 3.17(b) ofthe Seller Disclosure Schedule sets forth an accurate and complete list of all material Judgments to which theBusiness, any of the properties or assets used or held for use in connectionwith, necessary for or relating to the 

 

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Business, or the Acquired Company or the Seller in connection with theBusiness is or has been subject within the three (3) years prior to thedate of this Agreement.

 

Section 3.18           Permits.  Section 3.18 of the SellerDisclosure Schedule sets forth a complete list of all material permits and allpending applications therefore obtained by the Seller in connection with theoperation of the Business or the Purchased Assets.  As of the date of this Agreement, each suchpermit is valid and in full force and effect, and is not subject to any pendingor, to the Knowledge of the Seller, threatened administrative or judicialproceeding to revoke, cancel, suspend or declare such permit invalid in anyrespect.

 

Section 3.19           Legal Proceedings.  Section 3.19 of the SellerDisclosure Schedule sets forth a complete list of all outstanding Proceedingsagainst the Seller or any Affiliate of the Seller relating to the Business orthe Acquired Company.  There is noProceeding pending or, to the Seller’s Knowledge, threatened against theAcquired Company or against the Seller with respect to the Business or anyPurchased Asset that, if adversely determined, would have a Material AdverseEffect.

 

Section 3.20           Insurance.  The Acquired Company maintains, and throughthe Closing will continue to maintain, in full force and effect, policies ofinsurance against fire, theft and other casualties, and covering such otherLiabilities and business risks and properties of the Acquired Company.  A list and brief description of suchpolicies, including the policy number, the coverage, names of insurance carrier,principal amount or limit, annual premium and date of expiration of each policyis set forth in Section 3.20 of the Seller Disclosure Schedule.

 

Section 3.21           Brokers Fees.  None of the Seller, any Affiliate of theSeller or the Acquired Company has incurred any Liability to pay any fees or commissionsto any broker, finder or agent in connection with any of the transactionscontemplated by this Agreement for which the Purchaser would become liable orobligated.

 

Section 3.22           REACH.  Section 3.22 of the SellerDisclosure Schedule sets forth a complete and accurate list of all of chemicalsubstances that (a) the Seller in respect of the Business and (b) theAcquired Company, have pre-registered under Regulation (EC) 1907/2006 governingthe registration of chemicals in the European Union (the “Regulation”).  Each of the Seller and the Acquired Companyhas pre-registered by the due date any substance which is placed on the marketin the European Union and comprises or is incorporated in products manufacturedby the Business and which falls within the definition of a “phase in substance”under the Regulation.

 

Section 3.23           Disclaimer of OtherRepresentations and Warranties.  Therepresentations and warranties set forth in this Article 3 are theonly representations and warranties made by the Seller with respect to theBusiness, the Purchased Assets, the Assumed Liabilities, the Shares, theAcquired Company or any other matter relating to the transactions contemplatedby this Agreement.  Except asspecifically set forth in this Article 3, (a) the Seller isselling the Purchased Assets and the Shares to the Purchaser “as is” and “whereis” and with all faults, and makes no warranty, express or implied, as to anymatter whatsoever relating to the Business, the Purchased Assets, the AssumedLiabilities, the Shares, the Acquired Company or any other matter relating tothe transactions contemplated by this Agreement including as to (i) merchantabilityor fitness for any particular use or purpose, (ii) the operation of theBusiness by the Purchaser after the Closing in any manner or (iii) theprobable success or profitability of the Business after the Closing, and (b) noneof the Seller, the Acquired Company, any of their Affiliates, or any of theirrespective officers, directors, employees, agents, representatives orstockholders will have, or will be subject to, any Liability or indemnificationobligation to the Purchaser or any other Person resulting from the distributionto the Purchaser or its Affiliates or representatives of, or the Purchaser’suse of, any information relating to the Business, the 

 

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Acquired Company or anyother matter relating to the transactions contemplated by this Agreement,including any descriptive memoranda, summary business descriptions or anyinformation, documents or material made available to the Purchaser or itsAffiliates or representatives, whether orally or in writing, in certain “datarooms,” management presentations, functional “break-out” discussions, responsesto questions submitted on behalf of the Purchaser or in any other form inexpectation of the transactions contemplated by this Agreement.

 

**ARTICLE 4REPRESENTATIONS AND WARRANTIES OF THE PURCHASER**

 

ThePurchaser represents and warrants to the Seller as follows:

 

Section 4.1             Organization and Good Standing.  The Purchaser and any Designated Affiliate isa corporation or other legal entity duly organized, validly existing and ingood standing under the Laws of its jurisdiction of organization, and has allrequisite corporate power and authority to conduct its business as it ispresently conducted.

 

Section 4.2             Authority and Enforceability.  The Purchaser has all requisite corporatepower and authority to execute and deliver this Agreement and the Purchaser andany Designated Affiliate have all requisite corporate power and authority toexecute and deliver each Ancillary Agreement to which it is a party and toperform its respective obligations under this Agreement and each such AncillaryAgreement.  The execution, delivery andperformance of this Agreement and each Ancillary Agreement to which thePurchaser and any Designated Affiliate is a party and the consummation of thetransactions contemplated hereby and thereby have been duly authorized by allnecessary action on the part of the Purchaser and such Designated Affiliateparty thereto.  The Purchaser has dulyand validly executed and delivered this Agreement and, on or prior to theClosing, the Purchaser and any Designated Affiliate will have duly and validlyexecuted and delivered each Ancillary Agreement to which it is a party.  Assuming the due authorization, execution anddelivery of this Agreement and the Ancillary Agreements by the Seller and theother parties thereto, this Agreement constitutes, and at the Closing eachAncillary Agreement to which the Purchaser or any Designated Affiliate is aparty will constitute, the valid and binding obligation of the Purchaser andany Designated Affiliate, enforceable against the Purchaser and any DesignatedAffiliate in accordance with its terms, subject to (a) Laws of generalapplication relating to bankruptcy, insolvency and the relief of debtors and (b) Lawsgoverning specific performance, injunctive relief and other equitable remedies.

 

Section 4.3             No Conflict.  Upon entry of the Approval Order and subjectto it becoming a Final Order, except for the requirements of applicableAntitrust Laws, and except in any case that would not have a material adverseeffect on the ability of the Purchaser to perform its obligations under thisAgreement or on the ability of the Purchaser to consummate the transactionscontemplated by this Agreement, neither the execution, delivery and performanceby the Purchaser of this Agreement and by the Purchaser or any DesignatedAffiliate of any Ancillary Agreement to which the Purchaser or any DesignatedAffiliate is a party, nor the consummation by the Purchaser or any DesignatedAffiliate of the transactions contemplated by this Agreement, will (a) conflictwith or violate the certificate of incorporation, bylaws or other applicablecharter or organizational documents of the Purchaser or any DesignatedAffiliate, (b) result in a breach or default under or create in any Personthe right terminate, cancel, accelerate or modify, or require any notice, consentor waiver under, any Contract to which the Purchaser or any DesignatedAffiliate is a party or by which the Purchaser or any Designated Affiliate isbound, in any case with or without due notice or lapse of time or both, (c) resultin the imposition of any lien or other encumbrance on any of the assets of thePurchaser or any Designated Affiliate, (d) violate any Law or Judgmentapplicable to the Purchaser or any Designated Affiliate

 

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or (e) require thePurchaser or any Designated Affiliate to obtain any Governmental Authorizationor make any filing with any Governmental Authority.

 

Section 4.4             Legal Proceedings.  There is no Proceeding pending or, to thePurchaser’s knowledge, threatened against the Purchaser or any DesignatedAffiliate that questions or challenges the validity of this Agreement or thatmay prevent, delay, make illegal or otherwise interfere with the ability of thePurchaser or any Designated Affiliate to consummate any of the transactionscontemplated by this Agreement.

 

Section 4.5             Investment Intent.  The Purchaser and any Designated Affiliateare acquiring the Shares for the Purchaser’s and the Designated Affiliate’s ownaccount and investment purposes and are not acquiring the Shares with a viewto, or for sale in connection with, any distribution thereof within the meaningof any securities Laws.

 

Section 4.6             Brokers Fees.  Neither the Purchaser nor any DesignatedAffiliate nor any Person acting on their behalf has incurred any Liability topay any fees or commissions to any broker, finder or agent in connection withany of the transactions contemplated by this Agreement.

 

Section 4.7             Financial Capacity.   The Purchaser has immediately available cashin an amount sufficient to pay the Purchase Price or, if some or all of thePurchase Price will be obtained from external financing sources, the Purchaserhas delivered to the Seller executed commitments, including bridge commitments(collectively, the “Commitment Letters”), if necessary, for all suchfunds, in form and substance satisfactory to the Seller, and the Purchaser willhave available as of the Closing Date (either from its immediately availablecash or from the financing contemplated by the Commitment Letters, or acombination thereof) funds sufficient to pay the Purchase Price.  The Purchaser knows of no circumstance orcondition that it expects will prevent the availability at the Closing of therequisite financing to consummate the transactions contemplated by thisAgreement on the terms set forth in this Agreement.

 

Section 4.8             Independent Investigation.  The Purchaser has conducted its ownindependent investigation, review and analysis of the business, operations,assets, liabilities, results of operations, financial condition and prospectsof the Business and the Acquired Company as it has deemed appropriate, whichinvestigation, review and analysis was done by the Purchaser and its Affiliatesand representatives.  The Purchaser herebyacknowledges and agrees that (a) other than the representations andwarranties set forth in Article 3, none of the Seller, the ShareSelling Affiliate, the Acquired Company, any of their Affiliates, or any oftheir respective officers, directors, employees, agents, representatives orstockholders make or have made any representation or warranty, express orimplied, at law or in equity, as to any matter whatsoever relating to theBusiness, the Purchased Assets, the Assumed Liabilities, the Shares, theAcquired Company or any other matter relating to the transactions contemplatedby this Agreement including as to (i) merchantability or fitness for anyparticular use or purpose, (ii) the operation of the Business by thePurchaser after the Closing in any manner or (iii) the probable success orprofitability of the Business after the Closing, and (b) none of theSeller, the Share Selling Affiliate, the Acquired Company, any of theirAffiliates, or any of their respective officers, directors, employees, agents,representatives or stockholders will have or will be subject to any Liabilityor indemnification obligation to the Purchaser or any other Person resultingfrom the distribution to the Purchaser or its Affiliates or representatives of,or the Purchaser’s use of, any information relating to the Business, theAcquired Company or any other matter relating to the transactions contemplatedby this Agreement, including any descriptive memoranda, summary businessdescriptions or any information, documents or material made available to thePurchaser or its Affiliates or representatives, whether orally or in writing,in certain “data rooms,” management presentations, functional “break-out”discussions, responses to questions submitted

 

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on behalf of the Purchaseror in any other form in expectation of the transactions contemplated by thisAgreement.

 

**ARTICLE5**

**COVENANTS**

 

Section 5.1             Access and Investigation.

 

(a)           Untilthe Closing and upon reasonable advance notice from the Purchaser, the Sellerwill, and will cause the Acquired Company to, allow the Purchaser and itsrepresentatives reasonable access during normal business hours and without unreasonable interference withthe operation of the Business to (a) such materials and informationabout the Business and the properties of the Business and the Acquired Companyas the Purchaser may reasonably request and (b) specified members ofmanagement of the Business as the parties may reasonably agree. The foregoingcovenant will not require the Seller to provide the Purchaser or itsrepresentatives with access to any document or other communication that theSeller believes in good faith may be subject to any contractual confidentialityobligation or that may be covered by any attorney-client, work product or similarlegal privilege or to permit the Purchaser or its representatives to conductany Phase II or other invasive environmental testing procedures, includingconducting soil, ground water, air emissions or other testing relating to anyof the assets, property or facilities of the Seller or the Acquired Company.

 

(b)           Withoutthe prior written consent of the Seller, which may be withheld for any reasonor no reason, the Purchaser shall not contact any suppliers to, or customersof, the Business or any Employees or Acquired Company Employees in connectionwith or pertaining to any subject matter of this Agreement or the AncillaryAgreements.

 

Section 5.2             Operation of the Business.

 

Unlessotherwise ordered by the Bankruptcy Court sua sponte or on motion by a third party,and provided that no provision of this Section 5.2 shall requirethe Seller to make any payment to any of its creditors with respect to anyamount owed to such creditors on the Petition Date or which would otherwiseviolate the Bankruptcy Code, until the Closing, except as otherwise set forthin this Agreement or the Seller Disclosure Schedule or as otherwise consentedto by the Purchaser (which consent will not be unreasonably withheld,conditioned or delayed), the Seller will, and will cause the Acquired Companyto:

 

(a)           conductthe Business in the ordinary course of the Business in all material respects,taking into account that the Seller is in bankruptcy proceedings and use itscommercially reasonable efforts to keep available the services of the Employeesand Acquired Company Employees and to preserve the Business’ relationships withits customers and others doing business with it;

 

(b)           notamend the articles of incorporation or bylaws or other applicable charter ororganizational documents of the Acquired Company;

 

(c)           notissue, sell or pledge additional shares of the capital stock of the AcquiredCompany or securities convertible into any such shares, or any options,warrants or rights to acquire any such shares or other convertible securities;

 

(d)           notpurchase, redeem or otherwise acquire any outstanding shares of the capitalstock of the Acquired Company;

 

(e)           notdeclare, set aside or pay any dividend or other distribution in respect of thecapital stock of the Acquired Company, other than in cash;

 

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(f)            notincur any indebtedness for borrowed money of the Acquired Company or thatconstitutes an Assumed Liability, in either case in amounts in excess of onehundred thousand ($100,000) individually or five hundred thousand ($500,000) inthe aggregate;

 

(g)           notreject, terminate, permit to expire (to the extent the Seller is able toprevent such expiration by giving notice to renew to the relevant counterparty)or adversely amend any Material Contract;

 

(h)           notsettle or compromise with a value in excess of one hundred thousand ($100,000)in connection with any Proceeding involving the Seller or arising in connectionwith the operation of the Business or otherwise relating to the Business, thePurchased Assets or the Assumed Liabilities;

 

(i)            exceptas set forth on Schedule 5.2(i), not incur any capital expenditure orother expenditure with respect to property, plant or equipment used in or heldfor use in connection with, necessary for or relating the Business in excess oftwo hundred and fifty thousand ($250,000) individually or one million($1,000,000) in the aggregate;

 

(j)            notwaive or release any right or claim of a material value to the Business otherthan in the ordinary course of the Business;

 

(k)           notsell, lease, license, pledge or otherwise dispose of, or permit any Encumbranceon, any of the properties or assets of the Acquired Company or the Seller usedor held for use in connection with, necessary for or relating to the Business(other than sales of inventory for fair consideration and in the ordinarycourse of the Business);

 

(l)            not(i) acquire, by merger or consolidation with, or by purchase of all or asubstantial portion of the assets or stock of, or by any other manner, anybusiness or entity, by the Acquired Company or which would constitute aPurchased Asset or Assumed Liability, or (ii) enter into any jointventure, partnership or other similar arrangement for the conduct of theBusiness;

 

(m)          notmaterially change the remuneration or terms of employment of any Employee orAcquired Company Employee other than (A) in the ordinary course of theBusiness, (B) as required by Law or (C) for retention, incentive andsimilar payments relating to the consummation of the transactions contemplatedby this Agreement that will be paid by the Seller prior to or on the ClosingDate;

 

(n)                notmake, revoke or change any Tax election, adopt or change any Tax accountingmethod or period, file any amended Tax Return or settle any Tax claim orassessment, in each case with respect to the Acquired Company or the Business,that, individually or in the aggregate, are material to the Acquired Company orthe Business;

 

(o)                notchange the Seller’s accounting principles, methods or practices or investmentpractices in connection with or relating to the Business, other than changesthat are necessary to conform with GAAP or, in the case of the AcquiredCompany, German generally accepted accounting principles;

 

(p)                nottake any action to accelerate the payment of accounts receivable or delay thebilling or payment of accounts payable, outside of the ordinary course ofbusiness consistent with past practice;

 

(q)           noteffect anymaterial change in the practices of (i) ordering supplies and rawmaterials or (ii) manufacturing work in process or finished goodsInventory beyond the normal requirements of the Business to meet ordinarycustomer demands taking into account current Inventory levels for such product;provided, however,

 

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that if the Seller determines in good faith that it is in the bestinterest of the Business to make such change prior to the Closing, the Sellershall so notify the Purchaser in writing prior to making such change and thePurchaser shall not unreasonably withhold or delay its consent for these purposes;or

 

(r)            notagree in writing to take any of the action or actions prohibited by any of theforegoing clauses (b) through (q).

 

Section 5.3             Bankruptcy Actions.

 

(a)           Priorto or within five (5) Business Days after the execution of this Agreement,the Seller shall file with the Bankruptcy Court a motion (the “Sale Motion”)seeking, among other things, entry of (i) an order approving (A) thebidding protections described and/or set forth in Section 7.2 ofthis Agreement or otherwise set forth in the Sale Motion, and (B) certainbidding procedures for alternative offers for the Shares and Purchased Assets,which proposed order shall be substantially in the form of Exhibit Khereto (the “BiddingProcedures Order”), and (ii) an order approving this Agreementand the transactions contemplated thereby (including the sale of the PurchasedAssets to the Purchaser free and clear of all Encumbrances) should the purchaseoffer made by this Agreement constitute the highest and best offer for theShares and Purchased Assets pursuant to the Bidding Procedures Order, whichorder shall be substantially in the form of Exhibit L hereto (the “Approval Order”);*provided*, *however*, that the Bidding Procedures Orderand the Approval Order may include changes and amendments as agreed to by theSeller and the Purchaser.

 

(b)           TheSeller shall provide Purchaser with advance drafts of all Bankruptcy Courtfilings relating to the Sale Motion and shall comply with the noticerequirements set forth in the Bidding Procedures Order for providing notice ofthe entry of the Bidding Procedures Order and the hearing on the ApprovalOrder.  The Seller shall promptly providethe Purchaser with copies of all communications from the Bankruptcy Court orthird parties relating to the Sale Motion..

 

(c)           ThePurchaser shall use its reasonable best efforts to assist the Seller inobtaining entry of the Bankruptcy Court Orders, including providing testimonyas required at any hearing before the Bankruptcy Court.

 

Section 5.4             Exclusivity; No Solicitation ofTransactions.

 

(a)           TheSeller represents that, other than the transactions contemplated by thisAgreement, neither the Seller nor any of its Affiliates is party to or bound byany agreement with respect to a possible merger, sale, restructuring, refinancingor other disposition of all or any material part of the Business or thePurchased Assets or the Shares.

 

(b)           Priorto the entry of the Bidding Procedures Order on the Bankruptcy Courts docket,the Seller agrees that it shall not (i) execute an agreement with respectto an Alternative Transaction or (ii) except as provided in thisAgreement, seek or support Bankruptcy Court approval of a motion or orderinconsistent in any material respect with the transactions contemplated in thisAgreement.  The Seller agrees that itshall not, and shall cause its Affiliates not to, directly or indirectly,through any officer director, employee, agent, professional or advisor, solicitany bid with respect to an Alternative Transaction or participate in anynegotiations or discussions with respect to any Alternative Transaction exceptas contemplated by the Bidding Procedures Order; provided, however,that nothing herein shall preclude the Seller from taking any action in theCase seeking to sell, pursuant to the process contemplated by the BiddingProcedures Order, the Purchased Assets.

 

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(c)           Purchaseracknowledges that the Seller will solicit bids from other prospectivepurchasers for the sale of the Purchased Assets, on terms and conditionssubstantially the same in all respects to this Agreement and in accordance withthe procedures set forth in the proposed Bidding Procedures Order prior toentry thereof on the Bankruptcy Court’s docket, or pursuant to the Bidding ProceduresOrder after entry thereof on the Bankruptcy Court’s docket.  For the avoidance of doubt, prior to theentry of the Bidding Procedures Order on the Bankruptcy Court’s docket, theSeller shall not execute an agreement with respect to an Alternative Transaction.

 

Section 5.5             Consents and Filings.

 

(a)           Subject to the terms andconditions of this Agreement, and except with respect to approval by theBankruptcy Court, each of the parties will use their respective commerciallyreasonable efforts (i) to take promptly, or cause to be taken, allactions, and to do promptly, or cause to be done, all things necessary, properor advisable to consummate and make effective the transactions contemplated bythis Agreement and (ii) as promptly as practicable after the date of thisAgreement, to obtain all Governmental Authorizations (including EnvironmentalAuthorizations) from, and make all filings with, all Governmental Authorities(including any other national antitrust authorities with mandatory pre-mergerfiling requirements that are deemed by the Seller and the Purchaser, afterconsulting with one another, to be applicable to the transactions contemplatedby this Agreement (each “Governmental Antitrust Authority”)), and toobtain all other consents, waivers, approvals and other authorizations from,all other third parties, that are necessary or advisable in connection with theauthorization, execution and delivery of this Agreement and the consummation ofthe transactions contemplated by this Agreement.

 

(b)           TheSeller and the Purchaser agree to file with the applicable GovernmentalAntitrust Authority, as soon as reasonably practicable following the date ofthis Agreement, any filings or similar information submissions required underapplicable antitrust or other competition Laws of jurisdictions outside of theUnited States of America, including the Federal Republic of Germany.  Notwithstanding the foregoing, the Purchaserwill be solely responsible for all filing fees due under the HSR Act and anynon-US applicable Laws in connection with the filings described above andneither the Seller nor any of its Affiliates will have any Liability withrespect to the payment of such filing fees.

 

(c)           TheSeller and the Purchaser will promptly notify the other of any communication itor any of its Affiliates receives from any Governmental Antitrust Authorityrelating to the transactions contemplated by this Agreement, and will permitthe other party to review in advance any proposed communication by such partyto any Governmental Antitrust Authority. Neither party will agree to participate in any meeting with anyGovernmental Antitrust Authority in respect of any filings, investigation orother inquiry unless it consults with the other party in advance and, to theextent permitted by such Governmental Antitrust Authority, gives the otherparty the opportunity to attend and participate at such meeting.  The Seller and the Purchaser will coordinateand cooperate fully with each other in exchanging such information andproviding such assistance as the other party may reasonably request inconnection with the foregoing and in seeking early termination of anyapplicable waiting periods including under the HSR Act.  The Seller and the Purchaser will provideeach other with copies of all correspondence, filings or communications betweenthem or any of their representatives, on the one hand, and any GovernmentalAntitrust Authority or members of its staff, on the other hand, with respect tothis Agreement and the transactions contemplated by this Agreement.

 

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Section 5.6             Supplements to DisclosureSchedules.   The Seller shallpromptly, from time to time prior to the Closing by written notice to thePurchaser, supplement the Seller Disclosure Schedule or add a schedule to theSeller Disclosure Schedule (such added schedule to be deemed a supplementhereunder) in order to disclose any matter which, if occurring prior to thedate of this Agreement, would have been required to be set forth or describedin the Seller Disclosure Schedule or to correct any inaccuracy or breach in therepresentations and warranties made by the Seller in this Agreement.  Subject to this Section 5.6, noneof such supplements to the Seller Disclosure Schedule will be deemed to curethe representations and warranties to which such matters relate with respect tosatisfaction of the conditions set forth in Section 6.1(a) orotherwise affect any other term or condition contained in this Agreement; provided,however, that unless the Purchaser will have delivered a notice oftermination with respect to such matter as contemplated by Section 7.1(b) (tothe extent the Purchaser is entitled to deliver such notice pursuant to Section 7.1(b))within fifteen (15) Business Days of the receipt by the Purchaser of anysupplement to the Seller Disclosure Schedule pursuant to this Section 5.6,then the Purchaser will have waived any and all rights to terminate thisAgreement pursuant to Section 7.1(b) or otherwise arising outof or relating to the contents of such supplement and the resulting breach orbreaches of the representations and warranties and the Purchaser will be deemedto have accepted the contents of such supplement for all purposes of thisAgreement.

 

Section 5.7             Assignment of Contracts; Cure ofDefaults.

 

(a)           TheSeller and the Purchaser shall use commercially reasonable efforts to haveincluded in the Approval Order an authorization for the Seller to assume theIncluded Contracts and assign to the Purchaser all Included Contracts.

 

(b)           Subjectto entry of the Approval Order and it becoming a Final Order, at the Closingthe Purchaser shall at its expense cure any and all Cure Costs with respect tothe Included Contracts that will be transferred to the Purchaser at Closing asand in the amounts required by the Bankruptcy Court to assume and assign theIncluded Contracts under Section 365 of the Bankruptcy Code; provided,**however,that, notwithstanding the foregoing, the Purchaser shall be responsible forsuch cure whether such defaults occur or arise prior to or after commencementof the Case.

 

Section 5.8             Financing.   Notwithstanding anything contained in thisAgreement to the contrary, the Purchaser expressly acknowledges and agrees thatthe Purchaser’s obligations under this Agreement are not conditioned in anymanner whatsoever upon the Purchaser or any Designated Affiliate obtaining anyfinancing.  The Purchaser will keep theSeller apprised of all developments or changes relating to the financingcontemplated by the Commitment Letters. In the event that the Commitment Letters cease to be in full force andeffect at any time or the lenders party thereto indicate any unwillingness toprovide the financing contemplated thereby, or for any reason the Purchaserotherwise no longer believes in good faith that it or any Designated Affiliatewill be able to obtain the financing contemplated thereby, then the Purchaserwill promptly notify the Seller and use best efforts to obtain replacementfinancing arrangements or commitment letters as soon as reasonablypracticable.  The Purchaser will not, andwill not permit any of its Subsidiaries or Affiliates to, without the priorwritten consent of the Seller, take any action or enter into any transaction,including any merger, acquisition, joint venture, lease or other Contract ordebt or equity financing that would reasonably be expected to impair, delay orprevent the financing contemplated by the Commitment Letters.

 

Section 5.9             Confidentiality.

 

(a)           Theparties agree to continue to abide by that certain Confidentiality Agreementbetween the Seller and thePurchaser dated August 12, 2009 (the “Confidentiality Agreement”),which will survive until the Closing, at which time the

 

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Confidentiality Agreement will terminate; provided, however,that if this Agreement is, for any reason, terminated prior to the Closing, theConfidentiality Agreement will continue in full force and effect in accordancewith its terms; provided,further, that the ConfidentialityAgreement shall not apply to the Seller’s obligations under Section 5.3of this Agreement and any ancillary actions necessary to effectuate thetransaction contemplated in this Agreement.

 

(b)           Afterthe Closing, the Seller will, and will cause its Affiliates to, hold inconfidence, unless compelled to disclose by judicial or administrative processor by other requirements of Law, all non-public documents and information tothe extent relating to the Business (the “Business Information”), exceptto the extent that such Business Information (i) must be disclosed inconnection with the obligations of the Seller or its Affiliates pursuant tothis Agreement and the Ancillary Agreements, (ii) can be shown to havebeen in the public domain through no fault of the Seller or any of itsAffiliates or (iii) was later lawfully acquired by the Seller or any ofits Affiliates from sources other than those related to its prior ownership ofthe Business.  Notwithstanding theforegoing, in no event will this Section 5.9(b) limit orotherwise restrict the right of the Seller or any of its Affiliates to disclosesuch Business Information (w) to its and its Affiliates’ respectivedirectors, officers, employees, agents and advisors to the extent reasonablyrequired to facilitate the negotiation, execution, delivery or performance ofthis Agreement and the Ancillary Agreements, (x) to any GovernmentalAuthority or arbitrator to the extent reasonably required in connection withany Proceeding, (y) in connection with its indemnification obligationsunder this Agreement, including the defense of any Third Party Claim, and (z) aspermitted in accordance with Section 5.10.

 

(c)           Afterthe Closing, the Purchaser will, and will cause its Affiliates to, hold inconfidence, unless compelled to disclose by judicial or administrative processor by other requirements of Law, all Seller Information, except to the extentthat such Seller Information (i) must be disclosed in connection with theobligations of the Purchaser or its Affiliates pursuant to this Agreement andthe Ancillary Agreements, (ii) can be shown to have been in the publicdomain through no fault of the Purchaser or any of its Affiliates or (iii) waslater lawfully acquired by the Purchaser or any of its Affiliates from sourcesother than those related to the transactions contemplated by thisAgreement.  Notwithstanding theforegoing, in no event will this Section 5.9(c) limit orotherwise restrict the right of the Purchaser or any of its Affiliates todisclose such Seller Information (w) to its and its Affiliates’ respectivedirectors, officers, employees, agents and advisors to the extent reasonablyrequired to facilitate the negotiation, execution, delivery or performance ofthis Agreement and the Ancillary Agreements, (x) to any GovernmentalAuthority or arbitrator to the extent reasonably required in connection withany Proceeding, (y) in connection with its indemnification obligationsunder this Agreement, including the defense of any Third Party Claim, and (z) aspermitted in accordance with Section 5.10.

 

Section 5.10           Public Announcements.  Prior to the Closing, each party agrees notto issue any press release or make any other public announcement relating tothis Agreement without the prior written approval of the other party, unlessrequired by applicable securities Law, securities listing standards (in thereasonable opinion of counsel to the disclosing party), the applicableprovisions of the Bankruptcy Code, or the Bankruptcy Court, in which case thenon-disclosing party will, to the extent permitted by Law, have the right toreview such press release or other announcement prior to issuance, distributionor publication; *provided, however*,that each party acknowledges that the Seller shall take the bankruptcy actionsdescribed in Section 5.3; provided, further, that the parties haveagreed that the Seller shall be entitled to issue a press release on signing ofthis Agreement in a form that has been reviewed by the Purchaser prior to

 

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the date hereof.  Notwithstanding the foregoing, the Sellershall be entitled to issue communications to its employees (including theemployees of the Business) and to customers and suppliers of the Business,informing them of the transaction contemplated by this Agreement.

 

Section 5.11           Further Actions.  Subject to the other express provisions ofthis Agreement, upon the request of either party to this Agreement, the otherparty will execute and deliver such other documents, instruments and agreementsas the requesting party may reasonably require for the purpose of carrying outthe intent of this Agreement and the transactions contemplated by thisAgreement.

 

Section 5.12           Indemnification and Insurance.  The Purchaser will not, for a period of six (6) yearsafter the Closing, take or permit any action to alter or impair any exculpatoryor indemnification provisions now existing in the certificate of incorporationor bylaws or other applicable charter or organizational documents of theAcquired Company for the benefit of any individual who served as a director orofficer of the Acquired Company at any time prior to the Closing (each an “AffiliateIndemnified Party”), except for any changes which may be required toconform with changes in applicable Law and any changes which do not affect theapplication of such provisions to acts or omissions of such individuals priorto the Closing.

 

Section 5.13           Bulk Transfer Laws.  The Purchaser hereby waives compliance by theSeller and/or the Share Selling Affiliate with any applicable bulk sale or bulktransfer Laws of any jurisdiction in connection with the transactionscontemplated by this Agreement.

 

Section 5.14           Designated Affiliate.  The Purchaser will use its commerciallyreasonable efforts to designate a Designated Affiliate as soon as practicablefollowing the date of this Agreement and, in any event, will make suchdesignation not less than ten (10) days prior to the Closing.  The Purchaser acknowledges and agrees thatany representation, warranty or covenant of the Seller which is breached or nottrue and correct, shall be deemed not breached and true and correct to theextent such breach or inaccuracy resulted solely from the designation of aDesignated Affiliate.

 

Section 5.15           Use of Seller’s Name; Seller Marks.The Purchaser agrees that:

 

(a)           Withinninety (90) days after the Closing, the Purchaser will, and will cause itsAffiliates to, (i) remove or cause to be removed “Chemtura” or othersimilar mark and any other trademark, design or logo previously or currentlyused by the Seller or any of its Affiliates (the “Seller Marks”) fromall buildings, signs and vehicles of the Business, (ii) change the name ofthe Acquired Company to a name not including any Seller Mark, and (iii) ceaseusing the Seller Marks in electronic databases, web sites, productinstructions, packaging and other materials, printed or otherwise (all suchmaterials, together with buildings, signs and vehicles, the “Marked Assets”).

 

(b)           Immediatelyafter the Closing, the Purchaser will, and will cause its Affiliates to, ceaseusing the Seller Marks in all invoices, letterhead, advertising and promotionalmaterials, office forms and business cards.

 

(c)           Fromand after the Closing, the Purchaser will use commercially reasonable effortsto remove or cause to be removed the Seller Marks from all inventory sold bythe Business (including all Marked Assets); provided, however,that in no event will the Purchaser or any of its Affiliates use the SellerMarks after the six-month anniversary of the Closing Date, other than pursuantto the IP License Agreement.

 

(d)           ThePurchaser acknowledges and agrees that the Seller or an Affiliate of the Selleris the owner of the Seller Marks and all goodwill attached thereto.  This Agreement does not give the Purchaser orany of its Affiliates the right to use the Seller

 

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Marks except in accordance with this Agreement.  The Purchaser will not, and will not cause orpermit any of its Affiliates to, attempt to register the Seller Marks nor toregister anywhere in the world a mark that is the same as or similar to theSeller Marks.

 

(e)           Inno event will the Purchaser or any of its Affiliates advertise or hold itselfout as the Seller or any of its Affiliates after the Closing.

 

(f)            If,at any time after the Closing, the Purchaser or any of its Affiliates possessesany information belonging to or concerning the Seller or any of its Affiliatesthat is not necessary for the operation of the Business (such information, the “SellerInformation”), the Purchaser will promptly transfer, or cause to betransferred, such Seller Information to the Seller (without retaining a copythereof).  The Purchaser will not, andwill not allow any of its Affiliates to, use any Seller Information or disclosesuch information to any Person.  For thepurposes of this Agreement, Seller Information includes written, graphical ormachine-readable information that relates to trade secrets, product plans,software, vendor and customer information, business plans and data storedelectronically which are not Business Intellectual Property Rights.  The Seller acknowledges that following theClosing it will possess certain material Business Intellectual PropertyRights.  If, at any time after theClosing, the Seller or any of its Affiliates possesses any informationconstituting Business Intellectual Property Rights, the Seller will promptlytransfer, or cause to be transferred, such Business Intellectual PropertyRights to the Purchaser (without retaining a copy thereof).  The Seller will not, and will not allow anyof its Affiliates to, use any Business Intellectual Property Rights or discloseBusiness Intellectual Property Rights to any Person.  Following the fifth anniversary of the ClosingDate, the Seller shall no longer be presumed to possess any material BusinessIntellectual Property Rights.  Each partywill use commercially reasonable efforts to cooperate with the other party toidentify any information to be provided to the other party in accordance withthe foregoing.

 

Section 5.16           Refunds and Remittances.  If the Seller or any of its Affiliates, onthe one hand, or the Purchaser or any of its Affiliates, on the other hand,after the Closing Date receives any funds properly belonging to the other partyin accordance with the terms of this Agreement, the receiving party willpromptly so advise such other party and will promptly deliver such funds to anaccount or accounts designated in writing by such other party.

 

Section 5.17           Litigation Support.

 

(a)           Inthe event and for so long as the Seller actively is contesting or defendingagainst any action, investigation, charge, claim, or demand by a third party inconnection with (a) any transaction contemplated by this Agreement or (b) anyfact, situation, circumstance, status, condition, activity, practice, plan,occurrence, event, incident, action, failure to act, or transaction on or priorto the Closing Date involving the Business, the Acquired Company or the Sellerand its Affiliates, the Purchaser will cooperate with the Seller and itscounsel in the contest or defense, make available its personnel, and providesuch testimony and access to its books, records and other materials as shall bereasonably necessary in connection with the contest or defense, all at the solecontrol, cost and expense of the Seller (unless the Seller is entitled toindemnification therefor under Article 8).

 

(b)           Inthe event and for so long as the Purchaser actively is contesting or defendingagainst any action, investigation, charge, claim, or demand by a third party inconnection with (a) any transaction contemplated by this Agreement or (b) anyfact, situation, circumstance, status, condition, activity, practice, plan,occurrence, event, incident, action, failure to act, or transaction involvingthe Business, the Seller will

 

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cooperate with the Purchaser and its counsel in the contest or defense,make available its personnel, and provide such testimony and access to itsbooks, records and other materials as shall be reasonably necessary inconnection with the contest or defense, all at the sole control, cost andexpense of the Purchaser (unless the Purchaser is entitled to indemnificationtherefor under Article 8).

 

Section 5.18           Intercompany Accounts.  Effective prior to or at the Closing Date andsubject to the Bankruptcy Court Orders, except as otherwise contemplated herebyor by any Ancillary Agreement, all intercompany receivables, payables, loansand investments then existing between or among the Seller and/or any of itsSubsidiaries other than the Acquired Company, on the one hand, and the AcquiredCompany, on the other hand, shall be forgiven or settled, including by way ofcapital contribution or by way of dividend in kind or otherwise as appropriate.

 

Section 5.19           Assistance with Preparation ofFinancial Statements.  On or afterthe Closing Date, at the reasonable request of the Purchaser and subject tocustomary confidentiality restrictions, the Seller will cooperate with thePurchaser, and provide reasonable assistance to the Purchaser (includingcausing its personnel to be available for interviews during normal workinghours), in connection with the Purchaser’s preparation of any historical or proforma financial statements relating to the conduct of the Business prior to theClosing; provided, however, that no such cooperation or provision of assistancewill unreasonably interfere with the conduct of the businesses of the Sellerand its Affiliates, nor will the covenant set forth in this Section 5.19be deemed to grant to the Purchaser any right of access to the books andrecords of the Seller and its Affiliates. In addition to the services provided in the Transition ServicesAgreement, the Purchaser will compensate the Seller based on an hourly rate tobe agreed by the parties in good faith prior to making any Seller personnelavailable, and the Purchaser will also reimburse the Seller for allout-of-pocket costs and expenses incurred in connection therewith.

 

Section 5.20           Trade Accounts Payable, SharedAccounts Payable and Accrued Payroll and Benefits.  The Seller agrees that it will pay any andall outstanding Trade Accounts Payable, Shared Accounts Payable and AccruedPayroll and Benefits following the Closing in accordance with their terms, butin all circumstances within one hundred twenty (120) days following theClosing.

 

Section 5.21           Certain Commercial Arrangements.

 

(a)           Priorto and if necessary after Closing, the Seller and Purchaser shall negotiate ingood faith to agree terms for (i) a toll manufacturing agreement (the “IsopetronateHL-44 Toll Manufacturing Agreement”) pursuant to which the Purchaser wouldafter Closing supply Isopetronate HL-44 manufactured at the Taft, Louisianafacility to the Seller, (ii) a supply agreement (the “TNPP SupplyAgreement”) pursuant to which the Purchaser and the Purchaser would causethe Acquired Company to supply to an Affiliate of Seller, and the Seller wouldsupply to Purchaser from Seller’s Morgantown facility, the producttris(nonylphenyl) phosphite, and (iii) a supply agreement (the “Weston705 Supply Agreement”) pursuant to which the Seller would supply to thePurchaser, from Seller’s Morgantown facility, the product Weston 705.

 

(b)           Priorto and if necessary after Closing, the Seller and Purchaser shall negotiate ingood faith to agree terms for a distribution agreement or agreements (the “DistributionAgreement(s)”), pursuant to which Affiliates of Seller located in Mexico andcertain South American countries would act as distributors for the Business inMexico and those South American countries.

 

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(c)           Priorto Closing, the Seller and the Purchaser shall in good faith agree upon theterms of those parts of the TBT Supply Agreement, the TOT Supply Agreement andthe TPP/LPE Supply Agreement that are expressed to be subject to furtherdiscussion in Exhibits G, H and I respectively.

 

Section 5.22           German Corporate GroupArrangements.

 

(a)           Withoutlimiting any claims under this Agreement (in particular any claims pursuant to Section 9.1(a)),the Purchaser shall cause the Acquired Company not to, at any time after the Closing, raise any claim against theSeller or any Affiliate of the Seller or any of their respective directors,officers, employees, agents, or other representatives, or assign any such claimto a third party, arising from or in connection with:

 

(i)            any enterprise agreement (*Unternehmensverträge*)or equivalent agreement, or any cash pooling arrangement, in each case that wasin effect between the Seller (or its legal predecessor) or any Seller’sAffiliate on the one hand and the Acquired Company (or its legal predecessor)on the other hand at any time prior to the Closing Date, or from the amendmentor termination of any such agreement,

 

(ii)           any comfort letter or liquidity commitment provided by theSeller (or its legal predecessor) or any of Seller’s Affiliates in connectionwith, or for the benefit of, the Acquired Company at any time prior to theClosing Date, or from the amendment or termination of any such letter orcommitment,

 

(iii)          any existence-destroying intervention or omission (*existenzvernichtender Eingriff*) by the Seller (or its legalpredecessor) any of Seller’s Affiliates or any of their respective directors,officers, employees, agents, or other representatives at any time prior to theClosing Date,

 

(iv)          any re-payments of equity replacing shareholder loans orsecurities (*eigenkapitalersetzende Gesellschafterdarlehen**oder -sicherheiten*), or any other actiontaken or failure to act by the Seller (or its legal predecessor) or any of theSeller’s Affiliates or any of their respective directors, officers, employees,agents, or other representatives at any time prior to the Closing Date thatinfringes the rules of capital maintenance (*Kapitalerhaltungsvorschriften*)pursuant to German Law; or

 

(v)           **theshareholder relationship or any transaction between the Seller (or its legalpredecessor) and the Acquired Company***.*

 

(b)           TheParties agree that the domination agreement and the profit and loss poolingagreement currently in effect between the Share Selling Affiliate and theAcquired Company will be terminated prior to Closing by termination agreementwith effect as of December 31, 2009. In order to determine for the fiscalyear ending December 31, 2009 the Share Selling Affiliate’s claim, if any,against the Acquired Company for transfer of the Acquired Company’s profit (the“Profit Transfer Claim”) or, if any, the Acquired Company’s claim againstthe Share Selling Affiliate for compensation of the Acquired Company’s loss(the “Loss Compensation Claim”), as soon as reasonably practical after December 31,2009, Seller will prepare financial statements of the Acquired Company pursuantto German GAAP for the fiscal year ending December 31, 2009 (the “GermanGAAP Financial Statements”). The financial statement  principles set forth in Section 2.6shall apply to the German GAAP Financial Statements except that any caps orother financial limitations set forth therein shall not apply for purposes ofthis Section 5.22(b). For the determination of adjustments to theconsideration pursuant to Section 2.5 and 2.6, the ProfitTransfer Claim shall qualify as an account payable of the Acquired Companyreducing the Final Closing Net Working Capital by an amount equal to suchpayable, and

 

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the Loss Compensation Claim shall qualify as an account receivable ofthe Acquired Company increasing the Final Closing Net Working Capital by anamount equal to such receivable. Contemporaneously with the determination ofthe Final Closing Net Working Capital, if the German GAAP Financial Statementsreflect a profit, Purchaser shall pay on behalf of the Acquired Company the amountof the Profit Transfer Claim to the Share Selling Affiliate at the same time asany Final Net Working Capital adjustment payment pursuant to Section 2.6(which Final Net Working Capital adjustment shall be reduced by the ProfitTransfer Claim).  If the German GAAPFinancial Statements reflect a loss, Seller shall satisfy on behalf of theShare Selling Affiliate the Loss Compensation Claim by paying an amount equalto the Loss Compensation Claim to the Acquired Company, which payment shall besatisfied at the same time as any Final Closing Net Working Capital adjustmentpayment pursuant to Section 2.6 (which Final Net Working Capitaladjustment shall be increased by the Loss Compensation Claim).  For the avoidance of doubt, Purchaser’sindemnification obligation pursuant to Section 8 for breaches of Section 5.22(a) andSeller’s responsibility for pre-Closing Taxes in accordance with Section 9 shall remainunaffected by this Section 5.22(b). Section 9.2(d) shall apply mutatis mutandis for any TaxContest relating to any periods prior to the Closing in which the tax unitbetween the Share Selling Affiliate and the Acquired Company has been in place.

 

(c)           Fromand after the Closing, the Purchaser will indemnify and hold harmless theSeller Indemnified Parties from and against any and all Losses incurred by theSeller Indemnified Parties arising or resulting from collateral claims assertedby creditors of the Acquired Company against the Share Selling Affiliate as aresult of, and within six (6) months after the electronic publication of,the termination of the domination agreement and the profit and loss poolingagreement currently in effect between the Share Selling Affiliate and theAcquired Company.

 

(d)           Priorto the Closing, title to all inventory of the Business in Europe currentlyowned by the Seller or any Seller Affiliates shall be transferred to theAcquired Company, and all VAT required to be paid in connection with suchtransfer shall be attributed to the period prior to the Closing and shall be treatedin accordance with Section 9.1(f) of this Agreement.

 

(e)           TheSeller agrees that neither the Seller nor any Seller Affiliate, at any timeafter Closing, will raise any claim against the Acquired Company relating tothe shareholder relationship or any transaction between the Seller or anySeller Affiliate and the Acquired Company.

 

Section 5.23           Restrictive Covenants.

 

(a)           Fora period of five (5) years following the Closing Date, the Seller shallnot, and shall ensure that none of its Affiliates will, directly or indirectly(including as a stockholder, member or partner), solicit any customer of theBusiness existing from January 1, 2008 through the Closing Date for thepurposes of sale to that customer of any product (i) manufactured or soldby the Business at the Closing or (ii) competitive with any productmanufactured or sold by the Business at the Closing.

 

(b)           Notwithstandingthe foregoing, this Section 5.23 will not prohibit the Seller orany of its Affiliates, directly or indirectly, from (i) conducting anybusiness activities conducted by them as of the date of this Agreement (otherthan the Business), including the manufacture and sale of Seller IntermediateProducts to entities which are not customers of the Business from January 1,2008 through the Closing Date through the Closing; (ii) investing in orholding not more than ten percent (10%) of the outstanding voting stock orother ownership interests of any Person; or (iii) acquiring any ownership

 

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interest in any business or conducting any business activities of suchacquired business (including the manufacture or sale of Purchaser IntermediateProducts) in which the products of such acquired business that are competitivewith the Business or the Purchaser Intermediate Products represent less thantwenty-five percent (25%) of revenues of such acquired business so long as noBusiness Information is disclosed to such acquired business; so long as suchacquired business does not violate Section 5.23(a) followingsuch acquisition.

 

(c)           Fora period of five (5) years following the Closing Date, the Purchaser shallnot and shall ensure that none of its subsidiaries will, directly or indirectly(including as a stockholder, member or partner):

 

(i)            solicit any Retained BusinessProducts customer of the Seller existing from January 1, 2008 through theClosing Date for the purposes of sale to that customer of any (a) RetainedBusiness Product or (b) any product competitive with any Retained BusinessProduct; or

 

(ii)           provide or make available,whether by sale, lease, transfer, loan, gift or otherwise, and whether on atemporary or permanent basis, any of the Purchased Intellectual Property or theShared Intellectual Property to any Affiliate of the Purchaser for the purposeof producing or selling any Retained Business Product, or any productcompetitive with any Retained Business Product, to any Retained BusinessProduct customer of the Seller existing from January 1, 2008 through theClosing Date.

 

(d)           Notwithstandingthe foregoing, this Section 5.23 will not prohibit the Purchaser orany of its subsidiaries, directly or indirectly, from (i) conducting anybusiness activities conducted by them as of the date of this Agreement orengaging in the Business activities as conducted at the date of this Agreementor engaging in the manufacture and sale of Purchaser Intermediate Products; (ii) investingin or holding not more than ten percent (10%) of the outstanding voting stockor other ownership interests of any Person; or (iii) acquiring anyownership interest in any business or conducting any business activities ofsuch acquired business (including the manufacture or sale of Retained BusinessProducts) in which Retained Business Products represent less than twenty-fivepercent (25%) of revenues of such business; so long as such acquired businessdoes not violate Section 5.23(c) following such acquisition.In addition, nothing herein shall prohibit SK from making any other investmentsor any such investment entity (other than the Purchaser or any of the Purchaser’ssubsidiaries) from competing with the Retained Business Products, provided,however, that SK shall not provide or make available, whether by sale, lease,transfer, loan, gift or otherwise, and whether on a temporary or permanentbasis, any of the Purchased Intellectual Property or the Shared IntellectualProperty to any such investment entity for the purpose of producing or sellingany Retained Business Product, or any product competitive with any RetainedBusiness Product, to any Retained Business Product customer of the Sellerexisting from January 1, 2008 through the Closing Date; and providedfurther that SK and the Purchaser comply at all times with the confidentialityobligations set forth in Section 5.9 of this Agreement.

 

(e)           TheSeller and the Purchaser acknowledge and agree that the Supply Agreementscontain certain restrictions on the supply of Intermediate Products and theprovisions of this Section 5.23 shall not be construed to amend,waive or contradict the relevant provisions of the Supply Agreements.

 

(f)            Ifeither party discovers a potential breach of the foregoing provisions (a) through(d) of this Section 5.23, prior to bringing a claim or actionagainst

 

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suchparty, the discovering party shall provide the potential breaching party withnotice of such alleged breach and a reasonable opportunity, not to exceedthirty (30) days, to cease the conduct giving rise to the potential breach.

 

(g)           Unlessotherwise agreed to in writing by the Purchaser, during the period commencingon the date of this Agreement and ending on the one-year anniversary of theClosing Date, the Seller will not, directly or indirectly, for itself or onbehalf of or in conjunction with any other Person (other than in its capacityas a holder of not more than twenty-five percent (25%) of the outstandingvoting stock of a Person or as a passive investor in a privately-held Person),nor will it permit any of its Affiliates or their respective directors,officers, employees, agents, advisors or representatives to, directly orindirectly, employ or offer employment to any Transferred Employee unless suchTransferred Employee will have ceased to be employed by the Purchaser for aperiod of at least six (6) months prior thereto.

 

(h)           Unlessotherwise agreed to in writing by the Seller, during the period commencing onthe date of this Agreement and ending on the one-year anniversary of theClosing Date (or, if this Agreement is terminated prior to the Closing, endingsix (6) months after the date of termination), the Purchaser will not,directly or indirectly, for itself or on behalf of or in conjunction with anyother Person (other than in its capacity as a holder of not more thantwenty-five percent (25%) of the outstanding voting stock of a Person or as apassive investor in a privately-held Person), nor will it permit any of itssubsidiaries, Affiliates, directors, officers, employees, agents, advisors orrepresentatives to, directly or indirectly, call upon any Person who is, at thetime the Person is called upon, an employee of the Seller or any Affiliate ofthe Seller, for the purpose or with the intent of soliciting such employee awayfrom or out of the employ of the Seller or such Affiliate of the Seller, oremploy or offer employment to any Person who was or is employed by the Selleror any Affiliate of the Seller unless such Person will have ceased to beemployed by Seller and the its Affiliates for a period of at least six (6) monthsprior thereto.

 

(i)            ThisSection 5.23 will not be deemed to prohibit the Seller or thePurchaser from engaging in general media advertising or solicitation that maybe targeted to a particular geographic or technical area but that is nottargeted towards employees of the Purchaser or the Seller or their Affiliatesor hiring any individuals who respond to such advertising or solicitation.

 

Section 5.24           Transition Services Agreement.

 

(a)           Priorto the Closing, the Seller shall, at the Seller’s expense, use commerciallyreasonable efforts to facilitate the Business being operated in the ordinarycourse of business on the Seller’s information technology platform followingthe Closing as contemplated by the Transition Services Agreement. Any fees orother amounts charged by third party service providers before the Closing Datein connection with Seller’s preparation for provision of the informationtechnology services after Closing pursuant to the Transition Services Agreementshall not be included in Out-of-Pocket Expenses (as such term is defined in theTransition Services Agreement) and charged as such after Closing pursuant tothe provisions of the Transition Services Agreement (other than any fees orother amounts charged by third party service providers before the Closing Datefor rebranding or as a one-time fee for set up and acquisition of space forhosting hardware, each to the extent approved in advance by the Purchaser, suchapproval not to be unreasonably withheld or delayed).

 

(b)           Betweenthe date hereof and Closing, the Seller and Purchaser shall work in good faithto prepare the services schedule to the Transition Services Agreement,

 

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which shall set forth a Schedule of Services currently performed by Sellerand Seller Affiliates (other than by Transferred Employees) for the benefit ofthe Business in the ordinary course of the Business, it being acknowledged andagreed that such services will not include Tax or accounting services.

 

Section 5.25           REACH. Prior to and after theClosing, the Seller shall cooperate with and provide reasonable assistance tothe Purchaser, including without limitation, providing documents, studies andother data in Seller’s possession that are reasonably necessary for the Purchaserto comply with REACH with respect to the Purchased Assets, the Business and theAcquired Company.

 

**ARTICLE6**

**CONDITIONSPRECEDENT TO OBLIGATION TO CLOSE**

 

Section 6.1             Conditions to the Obligation ofthe Purchaser.  The obligation of thePurchaser to consummate the transactions contemplated by this Agreement issubject to the satisfaction, on or before the Closing Date, of each of thefollowing conditions (any of which may be waived by the Purchaser, in whole orin part):

 

(a)           Accuracyof Representations and Warranties. The representations and warranties of the Seller in Article 3must be true and correct in all respects as of the Closing (except to theextent any such representation or warranty speaks as of the date of thisAgreement or any other specific date, in which case such representation orwarranty must have been true and correct in all****respectsas of such date), except where the failure of such representations andwarranties to be so true and correct (without regard for any “material,” “MaterialAdverse Effect” or similar qualification) would not, individually or in theaggregate, constitute a Material Adverse Effect;

 

(b)           Performanceof Covenants.  All of the covenantsand obligations that the Seller is required to perform or comply with under thisAgreement on or before the Closing Date must have been duly performed andcomplied with in all material respects;

 

(c)           Consents.  Each of the Governmental Authorizations andconsents listed in Schedule 6.1(c) must have been obtained and mustbe in full force and effect, except for such consents which the failure toobtain would not result in a Material Adverse Effect, and all applicablewaiting periods (and any extensions thereof) under any applicable AntitrustLaws must have expired or otherwise terminated and all other approvals underother applicable Antitrust Laws must have been obtained;

 

(d)           Entryof Orders By Bankruptcy Court. The Bankruptcy Court shall have entered theBidding Procedures Order and the Approval Order, and the Bidding ProceduresOrder and the Approval Order shall have become Final Orders and shall not havebeen vacated, stayed, or reversed, or modified, amended, or supplemented in anymanner that has a Material Adverse Effect; provided*,*however, that it shall not be acondition to the Seller’s obligation to consummate the transactionscontemplated by this Agreement that the Approval Order be a Final Order if theApproval Order is not a Final Order solely as a result of an appeal of therelief granted pursuant to the Approval Order, which appeal (a) does notchallenge Purchaser’s good faith purchaser status under Section 363(m) ofthe Bankruptcy Code, (b) does not assert that the transactionscontemplated by this Agreement are avoidable pursuant to, or otherwiseviolates, Section 363(n) of the Bankruptcy Code, and (c) has notresulted in a stay of the Approval Order; and

 

(e)           NoAction.  There must not be in effectany Law or Judgment that would prohibit or make illegal the consummation of thetransactions contemplated by this

 

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Agreement or cause the transactions contemplated by this Agreement tobe rescinded following consummation.

 

(f)            Absence of Material Adverse Effect.  No Material Adverse Effect shall haveoccurred since the date of this Agreement and be continuing.

 

Section 6.2             Conditions to the Obligation ofthe Seller.  The obligation of theSeller to consummate the transactions contemplated by this Agreement is subjectto the satisfaction, on or before the Closing Date, of each of the followingconditions (any of which may be waived by the Seller, in whole or in part):

 

(a)           Accuracyof Representations and Warranties. The representations and warranties of the Purchaser in Article 4must be true and correct in all material respects as of the Closing (except tothe extent any such representation or warranty speaks as of the date of thisAgreement or any other specific date, in which case such representation orwarranty must have been true and correct in all material****respectsas of such date);

 

(b)           Performanceof Covenants.  All of the covenantsand obligations that the Purchaser is required to perform or comply with underthis Agreement on or before the Closing Date must have been duly performed andcomplied with in all material respects;

 

(c)           Consents.  Each of the Governmental Authorizations andconsents listed in Schedule 6.1(c), except for such consents which thefailure to obtain would not result in a Material Adverse Effect, must have beenobtained and must be in full force and effect, and all applicable waitingperiods (and any extensions thereof) under any applicable Antitrust Laws musthave expired or otherwise terminated and all other approvals under otherapplicable Antitrust Laws must have been obtained;

 

(d)           Entryof Orders By Bankruptcy Court.  TheBankruptcy Court shall have entered the Approval Order, and the Approval Ordershall have become a Final Order and shall not have been vacated, stayed, orreversed, or modified, amended, or supplemented in any manner that has a MaterialAdverse Effect; provided*,*however, that it shall not be a condition to the Seller’sobligation to consummate the transactions contemplated by this Agreement thatthe Approval Order be a Final Order if the Approval Order is not a Final Ordersolely as a result of an appeal of the relief granted pursuant to the ApprovalOrder, which appeal (a) does not challenge Purchaser’s good faithpurchaser status under Section 363(m) of the Bankruptcy Code, (b) doesnot assert that the transactions contemplated by this Agreement are avoidablepursuant to, or otherwise violates, Section 363(n) of the BankruptcyCode, and (c) has not resulted in a stay of the Approval Order; and

 

(e)           NoAction.  There must not be in effectany Law or Judgment that would prohibit or make illegal the consummation of thetransactions contemplated by this Agreement or cause the transactionscontemplated by this Agreement to be rescinded following consummation.

 

**ARTICLE 7**

**TERMINATION**

 

Section 7.1             Termination Events.  This Agreement may, by written notice givenbefore or at the Closing, be terminated:

 

(a)           bymutual written consent of the Purchaser and the Seller;

 

(b)           bythe Purchaser (so long as the Purchaser is not then in material breach of anyof its representations, warranties or covenants contained in this Agreement) ifthere has been a breach of any of the Seller’s representations, warranties orcovenants

 

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contained in this Agreement, which would result in the failure of acondition set forth in Section 6.1(a) or Section 6.1(b),and which breach has not been cured within thirty (30) days after writtennotice of the breach has been delivered to the Seller from the Purchaser to theextent capable of being cured;

 

(c)           bythe Seller (so long as the Seller is not then in material breach of any of itsrepresentations, warranties or covenants contained in this Agreement) if therehas been a breach of any of the Purchaser’s representations, warranties orcovenants contained in this Agreement, which would result in the failure of acondition set forth in Section 6.2(a) or Section 6.2(b),and which breach has not been cured within thirty (30) days after writtennotice of the breach has been delivered to the Purchaser from the Seller to theextent capable of being cured;

 

(d)           byeither the Purchaser or the Seller if any Governmental Authority has issued anonappealable final Judgment or taken any other nonappealable final action, ineach case having the effect of permanently restraining, enjoining or otherwiseprohibiting the transactions contemplated by this Agreement; provided, however,that the right to terminate this Agreement under this Section 7.1(d) willnot be available to any party whose failure to fulfill any material covenantunder this Agreement has been the cause of or resulted in the action or eventdescribed in this Section 7.1(d) occurring; or

 

(e)           bythe Seller or the Purchaser, if the Seller accepts or the Bankruptcy Courtapproves an Alternative Transaction for any of the Shares or Purchased Assetspursuant to the terms of the Bidding Procedures Order; provided, however, thatthe Purchaser shall not be entitled to terminate pursuant to this Section 7.1(e) ifand so long as the Purchaser is the Alternate Bidder (as such term is definedin Exhibit 1 to the Bidding Procedures Order);

 

(f)            bythe Purchaser if the Closing has not occurred (other than through the failureof the Purchaser to comply fully with its obligations under this Agreement) onor before May 31, 2010; or

 

(g)           bythe Seller if the Closing has not occurred (other than through the failure ofthe Seller to comply fully with its obligations under this Agreement) on orbefore May 31, 2010.

 

Section 7.2             Effect of Termination.

 

(a)           Ifthis Agreement is terminated pursuant to Section 7.1, thisAgreement and all rights and obligations of the parties under this Agreementautomatically end without Liability against any party or its Affiliates, exceptthat (a) Section 5.9(a) (*Confidentiality*),Section 5.10 (*Public Announcements*),Section 7.3 (*Certain Effects ofTermination*), Article 11 (*GeneralProvisions*) and this Section 7.2 will remain in fullforce and survive any termination of this Agreement and (b) if thisAgreement is terminated by a party because of the breach of this Agreement bythe other party or because one or more of the conditions to the terminatingparty’s obligations under this Agreement is not satisfied as a result of theother party’s failure to comply with its obligations under this Agreement, theterminating party’s right to pursue all legal remedies will, subject to Section 7.2(c)(iii),survive such termination unimpaired.

 

(b)                BreakupFee and Reimbursement.  In the eventthat (i) this Agreement is terminated by either the Seller or thePurchaser pursuant to Section 7.1(e) and (ii) anAlternative Transaction(s) is consummated no later than within twelve (12)months of such termination, then, upon the closing of such AlternativeTransaction, the Purchaser will be paid a fee (the “Breakup Fee”) equal to US fivehundred thousand dollars ($500,000) by

 

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the Seller.  Such payments willbe made by wire transfer in immediately available funds to an accountdesignated by the Purchaser, and the Purchaser shall have the right to be paidthe Breakup Fee from the first proceeds of the Alternative Transaction for anyof the Shares or Purchased Assets. In the event that this Agreement isterminated pursuant to Sections 7.1(b), 7.1(e), 7.1(f) (butonly if at the time of such termination, the Purchaser is the Alternate Bidder(as such term is defined in Exhibit 1 to the Bidding Procedures Order)) or7.1(g), in addition to any Breakup Fee, the Purchaser will be paidreimbursement of the Purchaser’s actual out-of-pocket due diligence cost andexpenses, in an amount not to exceed seven hundred and fifty thousand dollars($750,000) (“Reimbursement”). The Reimbursement shall be paid to thePurchaser, in the case of a termination pursuant to Section 7.1(e),on the earlier to occur of (i) the closing of the Alternative Transactionand (ii) the consummation of the plan of reorganization of the Seller and,in the case of a termination pursuant to Sections 7.1(b), 7.1(f) (butonly if at the time of such termination, the Purchaser is the Alternate Bidder(as such term is defined in Exhibit 1 to the Bidding Procedures Order)) or7.1(g), within five (5) business days following receipt or deliveryof notice in accordance with Section 7.1.

 

(c)           Releaseof Deposit.

 

(i)            If this Agreement is terminated pursuant to Sections 7.1(a),7.1(b), 7.1(d), 7.1(e), 7.1(f) or 7.1(g),the Deposit Agent will wire transfer the Deposit Amount to an accountdesignated by the Purchaser no later than five (5) Business Daysimmediately following such termination.

 

(ii)           If this Agreement is terminated pursuant to Section 7.1(c),the Deposit Agent will wire transfer the Deposit Amount to an accountdesignated by the Seller.

 

(iii)          If this Agreement is terminated as permitted by Section 7.1,the return of the Deposit Amount to the Purchaser pursuant to the terms of theDeposit Agreement and the payment of the Breakup Fee and/or Reimbursement, ifany, pursuant to the terms of this Section 7.2, shall be the soleand exclusive remedy of the Purchaser, whether at law or in equity, for anybreach by the Seller or any of its Affiliates of the terms and conditions ofthis Agreement or the Deposit Agreement. If this Agreement is terminated as permitted by Section 7.1(c),notwithstanding anything to the contrary in this Agreement, the Deposit shallbe retained by Seller as liquidated damages, and retention of the Deposit bythe Seller shall be the sole recourse against Purchaser, SK or its Affiliatesfor any breach by the Purchaser or SK of this Agreement, other than a breach ofSection 363(n) of the Bankruptcy Code. In the event of a breach bythe Purchaser or any of its Affiliates of Section 363(n) of theBankruptcy Code, the Seller shall be entitled to keep the Deposit Amount and topursue any other remedies available under Section 363(n) of theBankruptcy Code.

 

(iv)          Notwithstanding anything to the contrary contained in thisAgreement, the entry of the Bidding Procedures Order by the Bankruptcy Court isa condition precedent to the Seller’s obligation to pay, and payment of, theBreakup Fee and Reimbursement as otherwise required by this Section 7.2.  Subject to the approval of the BankruptcyCourt, the obligations of the Seller to pay the Breakup Fee and Reimbursementshall be entitled to administrative expense claim status in the Case withpriority pursuant to Section 507(a)(2) of the Bankruptcy Code, andpayable without further order of the Bankruptcy Court pursuant to the terms ofthis Agreement and the Bidding Procedures Order, and the obligation to pay theBreakup Fee and Reimbursement in full in cash when due shall not be discharged,modified, or otherwise affected by any plan of reorganization or liquidationfor the Seller.

 

Section 7.3             Certain Effects of Termination.  If the Purchaser or the Seller terminatesthis Agreement pursuant to Section 7.1, the Purchaser will complywith the Confidentiality

 

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Agreement regarding thereturn and/or destruction of any information furnished to the Purchaser inconnection with this Agreement.

 

**ARTICLE 8INDEMNIFICATION**

 

Section 8.1             Indemnification by the Seller.  If the Closing occurs, from and after thedate thereof, and subject to the limitations expressly set forth in Sections8.4 and 8.5, the Seller will indemnify and hold harmless the Purchaser,the Purchaser’s Affiliates and their respective directors, officers, employees,agents, representatives, stockholders and Affiliates (collectively, the “PurchaserIndemnified Parties”) from and against any and all Losses (other than (i) Losseswith respect to Taxes, for which the provisions of Section 9.1(a) willgovern) incurred by the Purchaser Indemnified Parties arising or resulting from(a) any breach of any covenant of the Seller set forth in this Agreement, (b) anyExcluded Liability, and (c) in connection with Statement of Objections,dated March 17, 2009, relating to the proceeding under Article 81 ofthe Treaty of the European Community and Article 53 of the EuropeanEconomic Area Agreement, any fines or other liability imposed upon the AcquiredCompany pursuant to Article 23(2)(a) of Regulation No. 1/2003and any Losses from related Civil Proceedings.

 

Section 8.2             Indemnification by the Purchaser.  If the Closing occurs, from and after thedate thereof, and subject to the limitations expressly set forth in Sections8.4 and 8.5, the Purchaser will indemnify and hold harmless theSeller, the Seller’s Affiliates and their respective directors, officers,employees, agents, representatives, stockholders and Affiliates (collectively,the “Seller Indemnified Parties”) from and against any and all Losses(other than (i) Losses with respect to Taxes, for which the provisions of Section 9.1(a) willgovern) incurred by the Seller Indemnified Parties arising or resulting from (a) anybreach of any covenant of the Purchaser set forth in this Agreement and (b) anyAssumed Liability.

 

Section 8.3             Claim Procedure.

 

(a)           Aparty that seeks indemnity under this Article 8 (an “IndemnifiedParty”) will give written notice (a “Claim Notice”) to the partyfrom whom indemnification is sought (an “Indemnifying Party”) whetherthe Losses sought arise from matters solely between the parties or from ThirdParty Claims described in Section 8.3(b).  The Claim Notice must contain (i) adescription and, if known, the estimated amount of any Losses incurred orreasonably expected to be incurred by the Indemnified Party, (ii) areasonable explanation of the basis for the Claim Notice to the extent of thefacts then known by the Indemnified Party and (iii) a demand for paymentof those Losses.

 

(b)           Ifthe Indemnified Party seeks indemnity under this Article 8 inresponse to a claim or Proceeding by another Person not a party to thisAgreement (a “Third Party Claim”), then the Indemnified Party will givea Claim Notice to the Indemnifying Party within ten (10) days after theIndemnified Party has received notice or otherwise learns of the assertion ofsuch Third Party Claim and will include in the Claim Notice (i) the factsconstituting the basis for such Third Party Claim and the amount of the damagesclaimed by the other Person, in each case to the extent known to theIndemnified Party, accompanied by reasonable supporting documentation submittedby such third party (to the extent then in the possession of the IndemnifiedParty) and (ii) the assertion of the claim or the notice of thecommencement of any Proceeding relating to such Third Party Claim; provided,however, that no delay or deficiency on the part of the IndemnifiedParty in so notifying the Indemnifying Party will relieve the IndemnifyingParty of any Liability under this Agreement except to the extent such delay ordeficiency prejudices or otherwise adversely affects the rights of theIndemnifying Party with respect thereto.

 

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(c)           Inthe event of a Third Party Claim, the Indemnifying Party will be entitled toparticipate in the defense thereof and, if it so chooses, assume at any timecontrol of the defense thereof with counsel reasonably satisfactory to theIndemnified Party by giving to the Indemnified Party written notice of itsintention to assume control of the defense of such Third Party Claim; provided,however, that the Indemnified Party may participate in the defense ofsuch Third Party Claim with its own counsel at its own expense, except asprovided in Section 8.3(d) below).

 

(d)           Theparty not controlling the defense of the Third Party Claim (the “Non-controllingParty”) may participate in the defense thereof at its own expense.  However, if the Indemnifying Party assumescontrol of such defense as permitted above and the Indemnified Party reasonablyconcludes that the Indemnifying Party and the Indemnified Party haveconflicting interests or different defenses available with respect to the ThirdParty Claim, then the reasonable fees and expenses of counsel to theIndemnified Party will be considered as “Losses” for purposes of thisAgreement.  The Non-controlling Partywill furnish the party controlling the defense of the Third Party Claim (the “ControllingParty”) with such information as it may have with respect to the ThirdParty Claim (including copies of any summons, complaint or other pleading whichmay have been served on such party and any written claim, demand, invoice,billing or other document evidencing or asserting the same) and will otherwisecooperate with and assist the Controlling Party and its counsel in the defenseof such Third Party Claim.  TheControlling Party will keep the Non-controlling Party reasonably advised of thestatus of such Third Party Claim and will consider in good faithrecommendations made by the Non-controlling Party with respect thereto.

 

(e)           TheIndemnifying Party will not agree to any settlement of, or consent to the entryof any Judgment (other than a Judgment of dismissal on the merits withoutcosts) arising from, any such Third Party Claim without the prior writtenconsent of the Indemnified Party; provided, however, that theconsent of the Indemnified Party will not be required if the Indemnifying Partyagrees in writing to pay any amounts payable pursuant to such settlement or anyJudgment and such settlement or Judgment includes a full, complete andunconditional release of the Indemnified Party from further Liability.  The Indemnified Party will not agree to anysettlement of, or the entry of any Judgment (other than a Judgment of dismissalon the merits without costs) arising from, any such Third Party Claim withoutthe prior written consent of the Indemnifying Party.

 

Section 8.4             Survival.**** All of therepresentations and warranties contained in this Agreement, and the right tocommence any claim with respect thereto, shall terminate at the Closing andnone of the parties hereto shall have any Liability with respect to suchrepresentations and warranties after the Closing.  All covenants contained in this Agreement (A) thatcontemplate actions to be taken after Closing will survive the Closing andcontinue in effect in accordance with their terms until the expiration of theapplicable statute of limitations or for such shorter period explicitlyspecified therein, except that for such covenants that survive for such shorterperiod, breaches thereof will survive until the expiration of the applicablestatute of limitations and (b) that contemplate actions to be taken onlyon or prior to Closing shall terminate and cease to be obligations as of theClosing and no claim, action or proceeding with respect to such covenant may bebrought after the Closing.  All claimsfor indemnification under this Agreement must be asserted pursuant to a ClaimNotice given prior to the expiration of the applicable survival period setforth in this Section 8.4.

 

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Section 8.5             Limitations on Liability.

 

(a)           Cap and Deductible. Notwithstanding anything to the contrary contained in this Agreement(except that the following limitations set forth in clauses (i), (ii) and (iii) willnot apply to Losses (including any Environmental Losses) arising under Section 8.1(c),Section 9.1 or Article 11 or adjustments pursuant to Section 2.6or Section 2.7):

 

(i)            no indemnification payments will be made by or on behalfof either Seller to Purchaser or Purchaser to Seller under this Agreement inrespect of any individual claim or series claims having the same nature or originwhere the Losses relating thereto are less than one hundred thousand dollars($100,000), and such items less than one hundred thousand dollars ($100,000)will not be aggregated for purposes of calculating the Deductible in clause (ii) below;

 

(ii)           no indemnification payments will be made by or on behalfof either Seller to Purchaser or Purchaser to Seller under this Agreement untilthe aggregate amount of Losses for which such indemnifying party would (but forthis clause (ii)) be liable thereunder exceeds two hundred and fifty thousanddollars ($250,000) (such amount being, the “Threshold”), but onceexceeded, such indemnifying party shall be liable for all Losses; and

 

(iii)          the aggregate total amount in respect of which the Sellerwill be liable to indemnify and hold harmless the Purchaser Indemnified Partiespursuant to this Agreement will not exceed one million, five hundred thousanddollars ($1,500,000).

 

(b)           Aggregate Cap. Notwithstanding anything to the contrary contained in this Agreement, theaggregate total amount in respect of which the Seller will be liable toindemnify and hold harmless the Purchaser Indemnified Parties pursuant to thisAgreement, including pursuant to Article 8, Article 9and Article 11, will not exceed an amount equal to the PurchaserDeemed Entity Value.

 

(c)           TaxRefunds, Insurance Proceeds and Other Payments.  The amount of any and all Losses for whichindemnification is provided pursuant to this Article 8 , Article 9or Article 11 will be net of any actual Tax benefit (reflecting anactual increase in cash Tax refund received or reduction in actual cash Taxespaid with respect to the period in which such Loss arose or such Liability waspaid) to which an Indemnified Party is entitled by reason of payment of suchLiability (taking into account any Tax cost or reduction in such Tax benefitsby reason of receipt of the indemnification payment) and any amounts of anyinsurance proceeds, indemnification payments, contribution payments orreimbursements receivable by, or payable in kind to, the Indemnified Party withrespect to such Losses or any of the circumstances giving rise thereto.  In connection therewith, if, at any timefollowing payment in full by the Indemnifying Party of any amounts of Lossesdue under this Agreement, the Indemnified Party receives any insuranceproceeds, indemnification payments, contribution payments or reimbursementsrelating to the circumstances giving rise to such Losses, the Indemnified Partywill promptly remit to the Indemnifying Party such proceeds, payments orreimbursements in an amount not to exceed the amount of the correspondingindemnification payment made by the Indemnifying Party.  The Purchaser will use (and will cause itsAffiliates to use) commercially reasonable efforts to collect the proceeds ofany available insurance which would have the effect of reducing any Losses (inwhich case the net proceeds thereof will reduce the Losses).

 

(d)           Mitigation.  The Indemnified Party will use itscommercially reasonable efforts to mitigate any Losses with respect to which itmay be entitled to seek indemnification pursuant to this Agreement.

 

Section 8.6             Exclusive Remedy.  From and after the Closing, the sole andexclusive remedy of the parties for any matter arising out of the transactionscontemplated by this

 

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Agreement will be pursuantto the indemnification obligations set forth in Article 8, Article 9and Article 11.  In no eventwill the Seller have any Liability for Losses arising from the conduct of theBusiness or the Acquired Company after the Closing.

 

**ARTICLE9**

**TAXMATTERS**

 

Section 9.1             Liability and Indemnificationfor Taxes.

 

(a)           If the Closing occurs, and subject to Section 8.4and the limitations expressly set forth in Sections 8.5(b) and 9.1(d),the Seller will indemnify the Purchaser Indemnified Parties against all Lossesfor (i) all Taxes of the Acquired Company that are attributable to anyPre-Closing Period (except (a) to the extent any such Taxes are reservedor accrued as a current liability on the Final Closing Net Working Capital, and(b) for any VAT (other than VAT arising from the transfer of OtherPurchased Assets and which shall be dealt with in accordance with Section 2.10)recoverable in the ordinary course of business of the Acquired Company),including all Taxes relating to the termination of the domination and profitand loss pooling agreements that the Acquired Company is a party to, (ii) allTaxes that are Excluded Liabilities, and (iii) all Taxes arising solelyout of or due to any breach of any covenant of the Seller set forth in thisAgreement.

 

(b)           If the Closing occurs, and subject to Section 8.4,the Purchaser will indemnify the Seller Indemnified Parties against all Lossesfor (i) all Taxes of the Acquired Company that are attributable to anyPost-Closing Period, except to the extent that such Losses for Taxes areattributable to any breach of the Seller’s representations and warranties in Section 3.12,(ii) all Taxes that are Assumed Liabilities, (iii) all TransferTaxes, and (iv) all Taxes arising solely out of or due to any breach ofany covenant of the Purchaser set forth in this Agreement.

 

(c)           With respect to any Straddle Period, any Losses for Taxeswill be allocated between a Pre-Closing Period and a Post-Closing Period byclosing the books at the end of the Closing Date, except that Tax items of aperiodic nature, such as property taxes or depreciation allowances calculatedon an annual basis, will be allocated by apportioning a pro-rata portion of suchTaxes to each day in the relevant Straddle Period.  This Section 9.1(c) does notapply to Transfer Taxes or VAT as a result of the transactions contemplated bythis Agreement, which are the sole responsibility of the Purchaser under theprovisions of Sections 9.1(e) and 9.1(f).

 

(d)           The Seller will not be required to indemnify the PurchaserIndemnified Parties for reductions in any Tax Attributes.  The Seller will not be required to indemnifythe Purchaser Indemnified Parties against Losses for Taxes attributable to aPre-Closing Period to the extent such Losses for Taxes could be reduced underapplicable Law by reason of net operating loss carryovers, Tax credits andsimilar Tax Attributes of the Acquired Company arising in the Pre-ClosingPeriod (assuming for the purposes of this sentence that such Tax Attributes arenot used to reduce Taxes in a Post-Closing Period after taking into account anyapplicable limitations on the use of such Tax Attributes).

 

(e)           Any applicable transfer or similar Taxes that are, orbecome due and payable as a result of the transactions contemplated by thisAgreement, including real estate transfer taxes, whether such Taxes are imposedby Law on the Seller, the Share Selling Affiliate, the Purchased Assets, thePurchaser or any Designated Affiliate (other than VAT, which is addressed insubsection (f) hereof) (such Taxes, the “Transfer Taxes”), will beborne by the Purchaser.  The Purchaserwill pay to the Seller the amount of any Transfer Taxes which the Seller or theShare Selling Affiliate is required to remit no later than five (5) daysprior to the date such Transfer Taxes are due. The parties will cooperate with each other in the provision of any

 

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information or preparationof any documentation that may be necessary or useful for obtaining anyavailable mitigation, reduction or exemption from any such Transfer Taxes, andfor timely making and filing all Tax Returns that may be required to complywith Laws relating to such Transfer Taxes.

 

(f)            The amount of any payment for a supply of goods orservices or the value of any supply made or deemed to have been made pursuantto this Agreement or any Ancillary Agreement will be exclusive of any VATproperly chargeable on the supply, and the amount of the VAT will be borne bythe recipient of the relevant goods or services in addition to any payment dueunder this Agreement or any Ancillary Agreement at the time the supply ismade.  In the event that any VAT isimposed upon or imposed against such recipient, the supplier of the relevantgoods or services will promptly notify the recipient of the VAT amount on avalid VAT invoice (unless the reverse charge procedure applies).  Upon receipt thereof, the recipient willpromptly remit to the supplier the amount specified in such VAT invoice, andthe supplier will make, or will cause to be made, any payments to theapplicable Governmental Authorities as required under applicable Law.

 

Section 9.2             TaxReturn Filing; Audit Responsibilities.

 

(a)           Except as set forth in Section 9.2(b), thePurchaser will control and be responsible for the filing of all Tax Returnsrequired to be filed with respect to the Acquired Company and, with respect toany Post-Closing Period or Straddle Period, the Purchased Assets after theClosing Date.  All such Tax Returns withrespect to a Pre-Closing Period or a Straddle Period will be completed inaccordance with past practice of the Acquired Company to the extent permittedby applicable Law, and a copy of such Tax Returns shall be provided to theSeller for its review and approval (not to be unreasonably withheld,conditioned or delayed).  The Purchaserwill make all payments required with respect to any such Tax Return, subject toany indemnification obligation of the Seller with respect hereto.

 

(b)           The Seller will control and be responsible for thepreparation and filing of all Tax Returns due after the Closing Date thatrelate to the Acquired Company or any Affiliate of the Acquired Company and areAffiliated Group Tax Returns which include Pre-Closing Period operations.  All such Tax Returns will be completed inaccordance with past practice to the extent permitted by applicable Law and acopy of such Tax Returns (or the portion thereof reflecting the AcquiredCompany) shall be provided to the Purchaser for its review and approval (not tobe unreasonably withheld, conditioned or delayed).  The Seller will make all payments requiredwith respect to any such Tax Return.  AnyTax Returns that must be filed in connection with any Transfer Taxes will beprepared by the party that customarily has primary responsibility for filingsuch Tax Returns pursuant to the applicable Law under and according to whichthe respective Tax Returns are due to be filed; provided, however,that the preparing party will deliver such Tax Returns for the other party’sreview and approval (not to be unreasonably withheld, conditioned or delayed)at least ten (10) Business Days prior to the applicable due date.

 

(c)           In the event that the Seller or the Purchaser is liableunder this Agreement for any Taxes paid by the other party with respect to anyTax Return, prompt reimbursement will be made.

 

(d)           If the Purchaser receives notice of a Tax Contest withrespect to the Acquired Company or the Purchased Assets which could reasonablybe expected to cause the Seller to have an indemnification obligation underthis Article 9, then the Purchaser will notify the Seller inwriting of such Tax Contest within five (5) Business Days of receivingsuch notice.  The Seller will have theright to control the conduct and resolution of such Tax Contest; provided,however, that the Seller may decline to participate in such TaxContest.  If the Seller controls theconduct of such Tax Contest, the Seller will not resolve such Tax Contest, tothe extent such Tax 

 

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Contest relates to or couldresult in an increase in Post-Closing Period Taxes, without the Purchaser’swritten consent, which consent will not be unreasonably withheld, conditionedor delayed.  If the Seller declines tocontrol such Tax Contest, then the Purchaser will have the right to control theconduct of such Tax Contest; provided, however, that thePurchaser will not resolve such Tax Contest without the Seller’s writtenconsent, which consent will not be unreasonably withheld, conditioned ordelayed.  Each party will bear its owncosts for participating in such Tax Contest.

 

(e)           Any net refunds and credits attributable to the payment ofTaxes for a Pre-Closing Period (to the extent not attributable to the use of aPost-Closing Tax Attribute) will be for the account of the Seller, and thePurchaser will promptly pay to the Seller any such refund or credit.

 

(f)            To the extent not inconsistent with the provisions ofthis Section 9.2, the procedures of Article 8 willapply in the case of any claim for Losses related to Taxes.

 

Section 9.3             Cooperation.  Each of the Seller and the Purchaser agreethat it will, and will cause its respective Affiliates to:

 

(a)           provide assistance to the other party as reasonablyrequested in preparing and filing Tax Returns, responding to Tax Contests andrecovering any VAT;

 

(b)           make available to the other party as reasonably requestedall information, records and documents relating to Taxes concerning theAcquired Company and the Business; and

 

(c)           retain any books and records that could reasonably beexpected to be necessary or useful in connection with any preparation by anyother party of any Tax Return or for any Tax Contest or other examination orProceeding relating to Taxes.  Such booksand records will be retained until the expiration of the applicable statute oflimitations (including extensions thereof). Thereafter, the Purchaser will not dispose of any such Tax Returns,books and records unless it first offers in writing such Tax Returns, books andrecords to the Seller and the Seller fails to accept such offer within sixty(60) days of it being made.

 

Section 9.4             No Code Section 338Election.  Neither the Purchaser, theAcquired Company, nor any of their Affiliates will, with respect to thetransactions contemplated by this Agreement, make any election under Section 338of the Code, other than an election under Section 338(g) of the Codeby the Purchaser with respect to the Acquired Company; provided, however, thatthe Purchaser shall not make any election under Section 338(g) of theCode with respect to the Acquired Company without the prior written consent ofthe Seller, which consent shall not be unreasonably withheld, conditioned ordelayed.  For purposes of this Section 9.4,the Seller shall not be deemed to unreasonably withhold, condition or delayconsent if such consent may have the effect of increasing the Seller’sindemnification liability under this Agreement or otherwise result in a Taxcost or other cost to the Seller that is not reimbursed by the Purchaser or itsAffiliates.

 

**ARTICLE10**

**EMPLOYEEMATTERS**

 

Section 10.1           Employees.

 

(a)           Atleast five (5) Business Days prior to the Closing Date, the Purchaser orits Affiliates will extend a written offer of employment to the activeEmployees, such offer to be on terms and conditions, including pay, position,responsibility and benefits, that are substantially similar in the aggregate toor better than the terms and conditions provided to such US Employeesimmediately prior to the Closing Date. With

 

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respectto inactive Employees, the Purchaser will extend a written offer of employmenton same terms and conditions as similar Employees of the Purchaser when suchinactive Employee is ready to return to active status; provided however, thatthis obligation shall not extend beyond December 31, 2010.  In addition, Purchaser, the Acquired Companyor a Purchaser Affiliate shall extend a written offer of employment to theemployees of Seller Affiliates set forth on Schedule 10.1(a) onsame terms and conditions as similar Acquired Company Employees. An activeEmployee shall be deemed to have accepted an offer of employment from thePurchaser if he or she presents himself or herself as available for activeemployment at his or her then applicable place of employment on the firstBusiness Day immediate following the Closing Date (or, in the case of an activeEmployee who is absent from work on the Closing Date due to vacation, holidayor temporary illness, the first Business Day following the Closing Date that suchactive Employee is scheduled to return or is fit to return to activeemployment) and executes commercially reasonable Purchaser employment documentsfor its new employees.

 

(b)           Each(i) Acquired Company Employee and (ii) Employee who accepts the offerof employment extended by the Purchaser or its Affiliate pursuant to Section 10.1(a),will be referred to in this Agreement as a “Transferred Employee”.  The Purchaser agrees to assume, or to causethe appropriate Affiliate of the Purchaser to assume, all Liabilities withrespect to the Transferred Employees which accrue following the ClosingDate.  The Seller may terminate theemployment of any Employee who does not become a Transferred Employee on theClosing Date.

 

(c)           ThroughDecember 31, 2010 (the “Continuation Period”), the Purchaser or itsAffiliates will provide the Transferred Employees with employee benefits(including but not limited to welfare benefits, severance and retirementbenefits) that are substantially equivalent to, and no less favorable as awhole than, those benefits provided to such Transferred Employees immediatelyprior to the Closing. During the Continuation Period, the Purchaser willcontinue to provide those former employees of the Business who left employmentprior to the Closing and who retain a benefit in any applicable Seller Plan(the “Transferred Former Employees”) and their dependants, beneficiariesand joint annuitants, with employee/retiree benefits that are substantiallyequivalent, and no less favorable than, the benefits to which such TransferredFormer Employees were entitled under the Seller Plans in effect immediatelyprior to the Closing.

 

(d)           Notwithstandinganything else in this Section 10.1, all Transferred Employees inthe United States shall be employees-at-will of the Purchaser.

 

(e)           Onor within five (5) Business days after March 31, 2010, the Sellershall notify the Purchaser of the gross amount payable to eligible Employees,on a per employee basis, for bonuses for 2009 performance and all management orsales incentive plan, stay bonus or retention bonus program or agreementpayments, in each case that are or would have been due and payable to anEmployee if such Employee were to have remained an employee of the Seller or anAffiliate of the Seller through March 31, 2010 (the “Bonus Payments”).  Upon the next payroll disbursement toEmployees thereafter, the Purchaser shall pay to each eligible Employee who isstill an Employee of the Business at such time such Employee’s relevant portionof the Bonus Payments, as notified by the Seller, less any withholdings anddeductions therefrom required by applicable Law. The Seller shall reimburse thePurchaser in an amount equal to the Bonus Payments one Business Day prior tothe payment to eligible Employees.

 

(f)            ThePurchaser agrees that (i) all unpaid accrued vacation and sick time as ofthe Closing Date shall be the Purchaser’s responsibility and shall be

 

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recognized by the Purchaser under its policies to the extent not paidby the Seller on or before the Closing Date and (ii) to the extent thatthe Seller is required by applicable Law or the terms of any Seller Plan tomake any payment to any Transferred Employee for any unpaid accrued vacation orsick time as of the Closing Date in connection with the consummation of thetransaction, the Purchaser agrees to promptly reimburse the Seller for theamount of such payment, but only to the extent that the Liabilities describedin (i) and (ii) above are properly reflected on the Final Closing NetWorking Capital.

 

Section 10.2           Defined Benefit Plans.

 

(a)           Effectiveas of the Closing Date, the Transferred Employees will no longer participate inthe Chemtura Corporation Retirement Plan (the “Pension Plan”), and theSeller will have taken all such action prior to the Closing Date as may berequired to achieve this result. Effective as of the Closing Date, the Purchaser will establish areplacement defined benefit pension plan (the “New Defined Benefit Plan”)intended to be qualified under Section 401(a) of the Code, and arelated trust intended to be exempt from taxation under Section 501(a) ofthe Code, for the benefit of the Transferred Employees, the terms of which planand trust will be substantially identical to the terms of the PensionPlan.  The Purchaser agrees to apply for,and to take all actions necessary to secure, as soon as practicable after theClosing Date, a determination letter from the IRS to the effect that the NewDefined Benefit Plan is qualified under the applicable provisions of theCode.  The Purchaser will recognize theservice of the Transferred Employees with the Seller or any of its Affiliatesprior to the Closing Date for all purposes under the New Defined Benefit Plan.

 

(b)           Assoon as practicable following the date of this Agreement, the Seller will causeits actuaries to determine, effective as of the Closing Date and in accordancewith the requirements of ERISA and Section 414(1) of the Code, anamount of assets of the Pension Plan (the “Plan Assets Amount”) equal tothe present value of benefits accrued to the Closing Date for all TransferredEmployees, determined as if the Transferred Employees terminated employmentwith the Seller as of the Closing Date and with regard to only those benefitsto which the Transferred Employees would be eligible based on their age andservice as of the Closing Date.  The PlanAssets Amount that will be transferred to the New Defined Benefit Plan will bethe amount which would be allocated to Transferred Employees if the PensionPlan were terminated as of the Closing Date and assets were allocated toparticipants in accordance with Section 4044 of ERISA using theassumptions and methodology of the PBGC for plan terminations as of the ClosingDate and such other reasonable assumptions not specified by the PBGC anddetermined by Seller’s actuary.

 

(c)           Assoon as practicable after the Seller’s actuaries determine the Plan AssetsAmount, the Seller will cause the transfer of an amount of cash equal to thePlan Assets Amount from the Pension Plan to the New Defined Benefit Plan,together with interest on such Plan Assets Amount at the prime rate of Citibankas of the Closing Date from the Closing Date to the date of transfer.  Benefit payments to Transferred Employees (ortheir beneficiaries) in pay status will continue to be made from the PensionPlan following the Closing Date and until the date of transfer.  Any such payments, adjusted for applicableinterest, will be deducted from the Plan Assets Amount.  Following the date of transfer, the Purchaserwill assume all Liabilities of the Seller and its Affiliates under the PensionPlan with respect to accrued benefits of the Transferred Employees, and theSeller and its Affiliates will have no further Liability to the Purchaser orany Transferred Employees with respect thereto following the date of transfer.

 

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Section 10.3           Defined Contribution Plan.

 

(a)           Effectiveas of the Closing Date, the Transferred Employees will no longer participate inthe Chemtura Corporation Employees Savings Plan (the “Savings Plan”),and the Seller will have taken all such action prior to the Closing Date as maybe required to achieve this result. As of the Closing Date, the Seller willcause each Transferred Employee to be one hundred percent (100%) vested in hisor her account balance.

 

(b)           Afterthe Closing Date, the Purchaser will establish or provide the TransferredEmployees with a new savings plan intended to be qualified under Sections 401(a) and401(k) of the Code, which shall provide (i) for immediate eligibilityfor participation for each Transferred Employee who participated in the SavingsPlan immediately prior to the Closing Date, and (ii) vesting andeligibility provisions that are no less favorable than those of the SavingsPlan as in effect immediately prior to the Closing Date, applied by aggregatingservice with the Seller and its Affiliates prior to the Closing Date withservice with the Purchaser and its Affiliates on and after the ClosingDate.  The Seller and the Purchaser agreeto cooperate fully with respect to the actions necessary to effect thetransactions contemplated in this Section 10.3, including theprovision of records and information as each may reasonably request from theother.

 

(c)           Witheffect from the Closing, the Purchaser shall cause its savings plan establishedpursuant to Section 10.3(b) above to accept rollovers ofdistributions to Transferred Employees from, and direct rollovers elected byTransferred Employees from, the Savings Plan, including any note evidencing aloan to any Transferred Employee under the Savings Plan.

 

Section 10.4           Welfare Arrangements.   Subject to Section 10.1(b) above,to the extent that any medical, dental, hospitalization, life or other similarhealth, welfare or insurance benefits are provided to Transferred Employeesthrough one or more Seller Plans (the “Welfare Plans”), the Purchaseragrees to designate or establish, effective as of the Closing, one or morebenefit plans, programs or arrangements for the purpose of providing suchbenefits to Transferred Employees.  ThePurchaser will cause such benefit plans, programs or arrangements to (i) waiveany preexisting condition limitations for conditions covered under theapplicable Welfare Plans available to the Transferred Employees immediatelyprior to the Closing and any applicable waiting periods, and (ii) creditTransferred Employees with any deductible and out-of-pocket expenses incurredby such employees and their dependents under the Welfare Plans during theportion of the current year preceding the Closing Date for purposes ofsatisfying any applicable deductible or out-of-pocket requirements under anysimilar plan, program or arrangement in which such employees may be eligible toparticipate after the Closing Date.  Withrespect to aggregate lifetime maximum benefits available under the Purchaser’swelfare benefit plans, a Transferred Employee’s prior claim experience underany of the Welfare Plans will not be taken into account.  Effective as of the Closing Date, theTransferred Employees (and their dependants) will no longer participate in theWelfare Plans and the Seller will have taken all such action prior to theClosing Date as may be required to achieve this result.  The Purchaser shall be responsible for makingtuition reimbursements or adoption assistance payments to any TransferredEmployees who (i) obtained all necessary approval under the applicabletuition reimbursement plan or adoption assistance plan of the Seller and itsAffiliates prior to the Closing Date, and (ii) satisfy all necessaryrequirements for reimbursement under such plans after the Closing Date.

 

Section 10.5           WARN Act.  The Purchaser and the Seller agree tocooperate in good faith to determine whether any notification may be requiredunder the WARN Act as a result of the transactions contemplated by theAgreement and, if such notices are required, to provide such notice in a mannerthat is reasonably satisfactory to each of the Purchaser and the Seller.

 

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Section 10.6           No Third-Party Beneficiaries.  Nothing contained in this Agreement,expressed or implied, is intended to confer upon any Employee any benefitsunder any employee benefit plan, fund or program including severance benefitsor the right to employment or continued employment with the Purchaser or anyAffiliate of the Purchaser for any period by reason of this Agreement.  In addition, the provisions of this Agreement,in particular this Article 10, are for the sole benefit of theparties hereto and their respective Affiliates and are not for the benefit ofany third parties.

 

Section 10.7           Negotiations with Employees.  To the extent required by applicable Law, theSeller and, on request by the Seller, the Purchaser, will (or will cause theirapplicable Affiliates to) notify the Employees or their representatives(including any relevant works council or trade union) of the transactionscontemplated by this Agreement and will thereafter enter into and properlyconduct consultations with the Employees and/or their representatives, all asrequired by Law and/or any applicable collective bargaining agreements.

 

**ARTICLE11**

**ENVIRONMENTALMATTERS**

 

Section 11.1           Indemnification by the Seller.  Notwithstanding anything to the contrarycontained in this Agreement, and subject to the limitations expressly set forthin Sections 11.2 and 11.3, the Seller shall indemnify and holdharmless the Purchaser Indemnified Parties from and against any and all Lossesincurred by the Purchaser Indemnified Parties relating to or resulting from:

 

(a)           anyUnknown Environmental Liability (“Unknown Environmental Liability Losses”);and

 

(b)           anyKnown Environmental Liability (“Known Environmental Liability Losses”).

 

Section 11.2           Survival.

 

(a)           Theindemnity set forth in Section 11.1(a) shall expire on theseven (7) year anniversary of the Closing Date (the “UnknownEnvironmental Liability Indemnity Period”); provided only, however, that ifany Purchaser Indemnified Party provides an Environmental Claim Notice inrespect of a particular Unknown Environmental Liability within the UnknownEnvironmental Liability Indemnity Period, the indemnity set forth in Section 11.1(a) shallsurvive until resolved with respect to Losses relating to or resulting fromthat Unknown Environmental Liability until the nine (9) year anniversaryof the Closing Date (the “Unknown Losses Termination Date”). Any UnknownEnvironmental Liability Losses relating to or resulting from an UnknownEnvironmental Liability that is not the subject of an Environmental ClaimNotice issued prior to the expiration of the Unknown Liability Indemnity Periodshall be deemed to constitute Assumed Liabilities with effect from theexpiration of the Unknown Environmental Liability Indemnity Period and theSeller shall have no Liability under this Agreement for such Losses thereafter.In no event shall the Seller have any Liability for any Unknown EnvironmentalLiability Losses that are incurred, paid or payable at any time after the UnknownLosses Termination Date, whether or not the relevant Unknown EnvironmentalLiability was the subject of an Environmental Claim Notice issued prior to theexpiration of the Unknown Environmental Liability Indemnity Period, and anysuch Losses shall be deemed to constitute Assumed Liabilities with effect fromthe Unknown Losses Termination Date.

 

(b)           Theindemnity set forth in Section 11.1(b) shall expire on thefour (4) year anniversary of the Closing Date (the “Known EnvironmentalLiability Indemnity Period”) provided only, however, that if any PurchaserIndemnified Party provides an

 

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Environmental Claim Notice in respect of a particular KnownEnvironmental Liability within the Known Environmental Liability IndemnityPeriod, the indemnity set forth in Section 11.1(a) shallsurvive until resolved with respect to Losses relating to or resulting fromthat Known Environmental Liability until the five (5) year anniversary ofthat Environmental Claim Notice (such anniversary date in respect of that KnownEnvironmental Liability being the “Known Losses Termination Date”). AnyKnown Environmental Liability Losses relating to or resulting from a KnownEnvironmental Liability that is not the subject of an Environmental ClaimNotice issued prior to the expiration of the Known Liability Indemnity Periodshall be deemed to constitute Assumed Liabilities with effect from theexpiration of the Known Environmental Liability Indemnity Period and the Sellershall have no Liability under this Agreement for such Losses thereafter. In noevent shall the Seller have any Liability for any Known Environmental LiabilityLosses that are incurred, paid or payable at any time after the Known LossesTermination Date for the relevant Known Environmental Liability, whether or notthe relevant Known Environmental Liability was the subject of an EnvironmentalClaim Notice issued prior to the expiration of the Known EnvironmentalLiability Indemnity Period, and any such Losses shall be deemed to constituteAssumed Liabilities with effect from such Known Losses Termination Date.

 

Section 11.3           Limitations on Liability.

 

(a)           Shiftingof Responsibility for Known Environmental Liability Losses.  Subject to Section 11.2(b), theamount in respect of which the Seller shall be liable to indemnify and holdharmless the Purchaser Indemnified Parties pursuant to Section 11.1(b) shallbe limited as follows:

 

(i)            The Seller shall indemnify and hold harmless thePurchaser Indemnified Parties from and against one hundred percent (100%) ofany and all Known Environmental Liability Losses relating to or resulting froma Known Environmental Liability that is the subject of an Environmental ClaimNotice issued prior to the one (1) year anniversary of the Closing Date;

 

(ii)           The Seller shall indemnify and hold harmless the PurchaserIndemnified Parties from and against seventy-five percent (75%) of any and allKnown Environmental Liability Losses relating to or resulting from a KnownEnvironmental Liability that is the subject of an Environmental Claim Noticeissued after the one (1) year anniversary of the Closing Date but prior tothe two (2) year anniversary of the Closing Date, and the remainingtwenty-five percent (25%) of such Known Environmental Liability Losses shall bedeemed to constitute Assumed Liabilities;

 

(iii)          The Seller shall indemnify and hold harmless the PurchaserIndemnified Parties from and against fifty percent (50%) of any and all KnownEnvironmental Liability Losses relating to or resulting from a KnownEnvironmental Liability that is the subject of an Environmental Claim Noticeissued after the two (2) year anniversary of the Closing Date but prior tothe three (3) year anniversary of the Closing Date, and the remainingfifty percent (50%) of such Known Environmental Liability Losses shall bedeemed to constitute Assumed Liabilities;

 

(iv)          The Seller shall indemnify and hold harmless the PurchaserIndemnified Parties from and against twenty-five percent (25%) of any and allKnown Environmental Liability Losses relating to or resulting from a KnownEnvironmental Liability that is the subject of an Environmental Claim Noticeissued after the three (3) year anniversary of the Closing Date but priorto the four (4) year anniversary of the Closing, and the remaining

 

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seventy-five percent (75%)of such Known Environmental Liability Losses shall be deemed to constituteAssumed Liabilities;

 

(v)           Mitigation. Subject to the terms and conditions setforth herein, the Purchaser shall, and shall cause each of the PurchaserIndemnified Parties to, use reasonable efforts to mitigate any EnvironmentalLosses with respect to which it may be entitled to seek indemnificationpursuant to this Article 11. Such efforts by the Purchaser shall include, without limitation, promptnotice to the Seller of any facts constituting the basis of any EnvironmentalClaim, as defined in Section 11.4(a), and reasonable actions tolimit the extent or duration of any Environmental Losses until such time as theSeller accepts responsibility for the resolution of such Environmental Claimpursuant to Section 11.4.

 

(b)           Conditions.  In no event shall the Seller be obligated toindemnify Purchaser Indemnified Parties pursuant to this Article 11for Known Environmental Liability Losses or Unknown Environmental LiabilityLosses (collectively “Environmental Losses”), and such EnvironmentalLosses shall be deemed to constitute Assumed Liabilities, unless EnvironmentalLosses for which indemnification is sought relate to: (i) a Proceeding,third-party claim filed in any court of competent jurisdiction (“Third PartyEnvironmental Claim”), or Judgment; or (ii) any requirement ofEnvironmental Law, Environmental Authorization, or Governmental Authorityacting pursuant to Environmental Law in existence on or before the Closing Dateand applicable to the operation of the Business, the Purchased Assets, or theOwned Real Property on or before the Closing Date and imposing or requiring anaffirmative response, action or obligation on the Purchaser.  The Seller shall have no obligation toindemnify Purchaser Indemnified Parties pursuant to this Article 11for any Environmental Losses that arise out of any “Phase II environmental siteassessments (ESAs)” (as that term is described in the ASTM E 1903-97 StandardGuide for Environmental Site Assessments: Phase II Environmental SiteAssessment Process) or any other invasive investigation, sampling or monitoringof environmental media conducted by Purchaser or the Purchaser IndemnifiedParties (collectively an “Environmental Investigation”) that is not: (i) requiredby applicable Environmental Law or Law in existence on or before the ClosingDate (including any such requirement of Environmental Law or Law relating toany maintenance, repair, renovation or expansion activities); or (ii) requiredby any Proceeding, Environmental Authorization, Judgment, GovernmentalAuthority or Third Party Environmental Claim applicable to the operation of theBusiness, the Purchased Assets or the Owned Real Property.  The Seller shall have no obligation toindemnify the Purchaser Indemnified Parties pursuant to this Article 11for any Environmental Losses that arise out of any report or notice to anyGovernmental Authority or third party regarding any Release of HazardousMaterials or the results of any Environmental Investigation conducted byPurchaser or a Purchaser Indemnified Party except to the extent such report ornotice is required by Law, Environmental Laws, Environmental Authorization orGovernmental Authorization.  The Sellershall have the unilateral right to raise reasonable objections and defenses toany alleged requirement of Law, Environmental Law, Environmental Authorization,or Governmental Authority acting pursuant to any Environmental Law, including,without limitation, any obligation to provide any report or notice to anyGovernmental Authority or to perform any environmental investigation orRemediation, and the Purchaser shall ensure that its actions under this Article 11will not in any way prejudice such rights.

 

(c)           Scopeof Seller Response Obligations.  TheSeller shall have no obligation to indemnify Purchaser Indemnified Partiespursuant to this Article 11 for any Environmental Losses, and suchEnvironmental Losses shall be deemed to constitute Assumed Liabilities, thatarise out of: (i) a change in use (including any shutdown of the

 

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Taft facility, but excluding change in activity levels for currentuses) by the Purchaser of any Owned Real Property in a manner that changes thePurchaser’s obligations under any Environmental Law impacting the EnvironmentalLosses; (ii) a change in Environmental Law after the Closing Date; or (iii) anew obligation under Environmental Law that arises out of a change inoperations or increase in production by Purchaser after the Closing.

 

Section 11.4           Procedure for Indemnification ForEnvironmental Losses.

 

(a)           Ifthe Purchaser seeks indemnity under this Article 11 (an “EnvironmentalClaim”), it will give written notice (an “Environmental Claim Notice”)to the Seller.  The Environmental ClaimNotice must set forth with reasonable particularity (to the extent then known)the nature of the condition or event giving rise to the Environmental Claimand, if known, the estimated amount of any Losses incurred or reasonablyexpected to be incurred by the Purchaser Indemnified Parties.  The Purchaser shall provide the Seller withcopies of sampling data, environmental reports, proposals and correspondence inthe possession of the Purchaser relevant to the Environmental Claim. If thePurchaser seeks indemnity under this Article 11, the Purchaser willpromptly provide the Seller with an Environmental Claim Notice as soon as thePurchaser is in possession of sufficient facts constituting the basis of anEnvironmental Claim, but in no event greater than thirty (30) calendar daysafter the relevant Purchaser Indemnified Party has received such facts or anynotice of a third party claim or Proceeding. The Purchaser will include in the Environmental Claim Notice the factsconstituting the basis for such Environmental Claim Notice and details of theamount of the damages claimed or other action required to resolve theEnvironmental Claim; provided, however, that no delay or deficiency on the partof the Purchaser in so notifying the Seller will relieve the Seller of anyLiability under this Agreement except to the extent such delay or deficiencyprejudices or otherwise adversely affects the rights of the Seller with respectthereto.

 

(b)           Subjectto the terms of this Section 11.4, the Seller shall have the right,by written notice to the Purchaser (a “Control Notice”), to conduct,direct, manage, implement and control the resolution of any Environmental Claimfor which the Seller has greater than fifty percent (50%) of theindemnification obligation under this Article 11, including theright to raise timely and reasonable objections and defenses to any obligationsimposed on the parties under any Law, Environmental Laws, EnvironmentalAuthorization, or Governmental Authorization, (any such Environmental Claim thesubject of a Control Notice being hereinafter an “Environmental ResponseAction”), so long as the Seller does so in a commercially reasonable manner.  The Seller shall comply with the requirementsand procedures contained in this Section 11.4 with respect to allEnvironmental Response Actions. The election of the Seller to assume thedefense of an Environmental Claim shall not be deemed an admission by theSeller that the Environmental Claim is within the scope of or subject toindemnification under this Article 11.

 

(c)           TheSeller shall be entitled to participate, with its own counsel and at its ownexpense, in the defense or conduct of any Environmental Claim that is not thesubject of an Environmental Response Action.

 

(d)           AllEnvironmental Response Actions that require the assistance of an environmentalconsultant, shall be performed by a third-party environmental consultantreasonably acceptable to the Purchaser. Any consultant retained by the Seller in connection with anEnvironmental Response Action must hold and maintain insurance of the types andamounts that are customary in the industry and the Purchaser and the relevantPurchaser Indemnified Parties shall, to the extent possible without increasingthe costs of such insurance, be added as additional named insureds on suchpolicies.

 

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(e)           Inrespect of an Environmental Response Action, the Seller shall, as soon aspracticable and in no event later than the date that is the earlier of: (i) anapplicable deadline under Environmental Laws or of a Governmental Authority; or(ii) thirty (30) days after the Purchaser’s receipt of the relevant ControlNotice, provide the Purchaser with a written response that provides thefollowing information with reasonable particularity to the extent of Seller’sknowledge at that time:  (i) thenature of the activities proposed to be undertaken, recognizing that the Sellermay not have sufficient information to propose a final response plan to addressthe matter and that the activities proposed may be limited to additionalinvestigation work; (ii) the identity of the environmental consultantproposed to undertake the action; (iii) the proposed time frame forundertaking the proposed action (including interim milestones to the extentappropriate) and, if appropriate, an estimate of the time frame required beforea final response plan can be developed; (iv) the estimated cost associatedwith such action (to the extent then estimable); and (v) copies ofsampling data, environmental reports, proposals and correspondence in thepossession of the Seller relevant to the subject matter (each such notice, an “EnvironmentalResponse Action Proposal”).

 

(f)            ThePurchaser shall, as soon as practicable and in no event later than the datethat is the earlier of (i) an applicable deadline under Environmental Lawsor of a Governmental Authority; or (ii) thirty (30) days after receipt ofthe Environmental Response Action Proposal, notify the Seller, in writing, thatthe Purchaser, in whole or in part, approves of (“Approval Notification”)or objects to (“Dispute Notification”) such Environmental ResponseAction Proposal, including the selection of the environmental consultant.  The Purchaser may object to any EnvironmentalResponse Action Proposal only to the extent that it reasonably determines thatthe Proposal is inconsistent with the terms of Section 11.4(l).  Issuance of such Approval Notification shallgrant the Seller, its representatives and consultants reasonable rights ofaccess to the relevant Owned Real Property to conduct activities in conjunctionwith the Environmental Response Action Proposal; provided, however, that the Sellershall provide reasonable prior notice of any dates or times the Seller or itsconsultants or representatives plan to access the relevant Owned Real Propertyand shall accommodate the Purchaser’s schedule to the extent reasonablypracticable.  In the event the Purchaserissues a Dispute Notification objecting, in whole or in part, to anEnvironmental Response Action Proposal, the Purchaser shall include in suchDispute Notification details of its specific disagreement regarding suchEnvironmental Response Action Proposal, including the basis for the Purchaser’sdetermination that the Environmental Response Action Proposal is not consistentwith the terms of Section 11.4(l). The Purchaser agrees that its approval of an Environmental ResponseAction Proposal shall not be unreasonably withheld or delayed.  In the event the Purchaser fails to approveor object to the Environmental Response Action Proposal within thirty (30) daysafter its receipt thereof, the Environmental Response Action Proposal shall be deemedapproved.

 

(g)           Inthe event the Purchaser objects to an Environmental Response Action Proposal orany portion thereof under Section 11.4(f), the Purchaser and theSeller shall thereafter negotiate in good faith in an attempt to reachagreement as to the disputed Environmental Response Action Proposal.  In the event the Purchaser and the Seller areunable to resolve the dispute within a reasonable period of time, the partiesshall jointly select and retain a mutually agreeable nationally recognized qualifiedthird party independent environmental consultant or expert (“IndependentConsultant”): (i) to determine whether the disputed EnvironmentalResponse Action Proposal is consistent with the terms of Section 11.4(l) ;and (ii) in the event the Independent Consultant determines the disputedEnvironmental Response Action Proposal is not consistent with the terms of

 

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Section 11.4(l), the Independent Consultantshall recommend an alternative Environmental Response Action Proposal that isconsistent with the terms of Section 11.4(l).  The determination of the IndependentConsultant shall be binding on the Seller and the Purchaser.  All fees and expenses of the IndependentConsultant shall be borne equally by the Purchaser and the Seller.

 

(h)           Withrespect to any Environmental Response Action, the Seller agrees to provide thePurchaser with the following:  (i) copiesof all work plans, test results, sampling data, surveys and other datagenerated by the Seller and its representatives, promptly upon the availabilitythereof, but in any event, prior to submitting the same to any GovernmentalAuthority; (ii) copies of all material draft reports and final reports,plans and other documents developed with respect to the Environmental ResponseAction, including any such materials to be submitted to any GovernmentalAuthority prior to any such submission; (iii) an opportunity to meet withthe Seller and/or its representatives prior to and following any substantivecommunications or meetings with any Governmental Authority, (iv) theopportunity to attend and participate in substantive meetings orteleconferences with Governmental Authorities; and (v) an opportunity totimely comment upon the foregoing and any other proposed materialdeterminations or actions relating to investigative, testing and remedialactions and the reporting of the same to any Governmental Authority.  The Seller shall provide due consideration toany comments or suggestions provided by the Purchaser.  Notwithstanding the foregoing, in no eventshall the Purchaser’s actions as set forth herein interfere with or compromisethe Seller’s pursuit of any Environmental Response Action as it deemsreasonably appropriate consistent with the terms of this Agreement.

 

(i)            Notwithstandinganything to the contrary in this Agreement, the Seller shall develop andimplement the relevant Environmental Response Actions in a manner that does notunreasonably interfere with the existing operations of the Business by the Purchaserat the relevant Owned Real Property, recognizing that the Purchaser shallreasonably cooperate with the Seller to ensure that any Environmental ResponseAction is implemented consistent with the terms of Section 11.4(l).

 

(j)            TheSeller agrees to diligently perform (or direct its consultants to perform) allEnvironmental Response Actions in a good and workman-like manner in accordancewith accepted industry practices and standards in compliance with applicableEnvironmental Laws and any of the Purchaser’s or the Businesses’ reasonablesite-specific health and safety requirements or policies that are comparable tothose which are customary in the industry and which are provided to the Sellerprior to initiation of any Environmental Response Action.  If the Seller fails to diligently undertake orimplement the Environmental Response Action in a good and workmanlike manner inaccordance with accepted industry practices and standards and in compliancewith its obligations and terms of this Article 11, the Purchaser,following written notice to the Seller and a reasonable opportunity to curedepending upon the nature of the alleged failure, which cure period shall notbe less than thirty (30) days following such written notice under anycircumstances, shall have the right to conduct, direct, manage, implement andcontrol the relevant Response Action provided the procedures in this Section 11.4shall be complied with, substituting in each case (other than paymentobligations), the Purchaser for the Seller and vice versa.

 

(k)           TheSeller shall not agree to any settlement of, or consent to the entry of anyJudgment (other than a Judgment of dismissal on the merits without costsrelating to an Environmental Response Action) arising from or relating to anyEnvironmental Losses without the prior written consent of the Purchaser, whichconsent

 

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shall not be unreasonably withheld or delayed, other than a settlementor judgment for solely monetary damages.

 

(l)            Withrespect to any Environmental Losses for which the Seller has the right tocontrol resolution pursuant to an Environmental Response Plan under this Article 11,the Seller shall be entitled to use the most cost effective responsetechniques, including risk-based Remediation standards consistent with thecurrent industrial use of the Owned Real Property and utilization of activityand use limitations, institutional controls and engineered barriers, in eachcase, to the extent (i) authorized by applicable Environmental Law; and (ii) consistentwith and that does not unreasonably restrict or interfere with the existingoperation of the Business by the Purchaser at the Owned Real Property.

 

Section 11.5           Taft Air Issue.

 

(a)           TheSeller shall perform the actions set forth on Schedule 11.5 beforeClosing (except as otherwise set forth on Schedule 11.5) or otherwiserequired to be taken by a Governmental Authority prior to the Closing Date toresolve the Taft Air Issue.

 

(b)           If,at or within the twelve (12) months after Closing, emissions from andoperational parameters of Emission Point No. 001-05GP (Thermal OxidizerUB-1300 Control Device) at the Taft facility continue to be in excess ofemission limits or operational requirements established by any GovernmentalAuthorization or Environmental Law, then the Seller shall, within thirty (30)days after presentation of an invoice therefor, reimburse the Purchaser for anycosts and expenses incurred by the Purchaser after Closing in performingfurther repairs, services and maintenance on the Thermal Oxidizer UB-1300Control Device, up to a maximum reimbursement hereunder of one hundred thousanddollars ($100,000).

 

(c)           Anypenalties or fines assessed for an occurrence of the Taft Air Issue pre-Closingand reported by Seller to a Governmental Authority shall be considered a KnownEnvironmental Liability subject to the limitations on liability in Section 11.3(a).  Any penalties or fines assessed for any otheroccurrence of the Taft Air Issue pre-Closing and not reported by Seller to aGovernmental Authority shall be considered an Unknown Environmental Liability,but only to the extent the fine or penalty is assessed within the UnknownEnvironmental Liability Indemnity Period.

 

(d)           Exceptas aforesaid in this Section 11.5, Seller shall have noresponsibility or liability in respect of the Taft Air Issue, or for any Lossesarising from or in connection therewith, after the Closing.

 

**ARTICLE12**

**GENERALPROVISIONS**

 

Section 12.1           Notices.  All notices and other communications under thisAgreement must be in writing and are deemed duly delivered when (a) deliveredif delivered personally or by internationally recognized overnight courierservice (costs prepaid), (b) sent by facsimile with confirmation oftransmission by the transmitting equipment (or, the first Business Dayfollowing such transmission if the date of transmission is not a Business Day)or (c) received or rejected by the addressee, if sent by United States ofAmerica certified or registered mail, return receipt requested; in each case tothe following addresses or facsimile numbers and marked to the attention of theindividual (by name or title) designated below (or to such other address,facsimile number or individual as a party may designate by notice to the otherparty):

 

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Ifto the Seller:

 

ChemturaCorporation

199Benson Road

Middlebury,Connecticut 06749

UnitedStates of America

Facsimile:+1 203 573 3118

Attention:General Counsel

 

witha copy (which will not constitute notice) to:

 

Baker &McKenzie LLP

130East Randolph Drive

Chicago,Illinois, 60601

UnitedStates of America

Facsimile:+1 312 698 2702

Attention:  Edward J. West, Esquire

 

Ifto the Purchaser:

 

SKCapital Partners II, L.P.

400Park Avenue

Suite 810

NewYork NY 10022

Facsimile:+1 212 867 4525

Attention:Dr. Barry Siadat

 

witha copy (which will not constitute notice) to:

 

SKCapital Partners II, L.P.

1515N Federal Highway

Suite 405

BocaRaton FL 33432

Facsimile:+1 561 892 2928

Attention:Mark Delevie, Esquire

 

andto:

 

MorganLewis & Bockius, LLP

502Carnegie Center

Princeton,NJ 08540

Facsimile:+1 609 919 6701

Attention:Steven M. Cohen, Esquire

 

Section 12.2           Amendment.  Except as contemplated by Section 5.6,this Agreement may not be amended, supplemented or otherwise modified except ina written document signed by each party to be bound by the amendment and thatidentifies itself as an amendment to this Agreement.

 

Section 12.3           Specific Performance.  Each of the Seller and the Purchaseracknowledge and agree that the other party would be damaged irreparably in theevent of a breach of this Agreement. Accordingly, the parties agree that, prior to the termination of thisAgreement

 

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pursuantto Section 7.1, in the event of a breach of the provisions of thisAgreement, the non-breaching party shall have the right to seek temporary orpermanent injunctive relief, or to enforce specifically the provisions of thisAgreement, in any court of competent jurisdiction as may be available under theLaws and rules applicable in such jurisdiction, in addition to any otherremedy to which they may be entitled at law or in equity.

 

Section 12.4           Waiver and Remedies.  The parties may (a) extend the time forperformance of any of the obligations or other acts of the other party to thisAgreement, (b) waive any inaccuracies in the representations andwarranties of the other party to this Agreement contained in this Agreement or (c) waivecompliance with any of the covenants or conditions for the benefit of suchparty contained in this Agreement. Except as contemplated by Section 5.6: (i) any suchextension or waiver by a party to this Agreement will be valid only if setforth in a written document signed on behalf of the party against whom theextension or waiver is to be effective; (ii) no extension or waiver willapply to any time for performance, inaccuracy in any representation orwarranty, or noncompliance with any covenant or condition, as the case may be,other than that which is specified in the written extension or waiver; and (iii) nofailure or delay by a party in exercising any right or remedy under thisAgreement or any of the documents delivered pursuant to this Agreement, and nocourse of dealing between the parties, operates as a waiver of such right orremedy, and no single or partial exercise of any such right or remedy precludesany other or further exercise of such right or remedy or the exercise of anyother right or remedy.  Except asprovided in Sections 5.6 and 8.6, any enumeration of a party’srights and remedies in this Agreement is not intended to be exclusive, and aparty’s rights and remedies are intended to be cumulative to the extentpermitted by law and include any rights and remedies authorized in law or inequity.

 

Section 12.5           Entire Agreement.  This Agreement (including the Schedules andExhibits hereto and the documents and instruments referred to in this Agreementthat are to be delivered at the Closing) constitutes the entire agreementbetween the parties and supersedes any prior understandings, agreements orrepresentations by or between the parties, or either of them, written or oral,with respect to the subject matter of this Agreement.  Notwithstanding the foregoing, theConfidentiality Agreement will remain in effect in accordance with its terms asmodified pursuant to Section 5.9.

 

Section 12.6           Assignment, Successors and NoThird Party Rights.** **This Agreement binds and benefitsthe parties and their respective successors and assigns. No party may assignany rights, or delegate the performance of any of its obligations, under thisAgreement, whether by operation of law or otherwise, without the prior writtenconsent of the other parties.  Anypurported assignment or delegation in contravention of the foregoing shall bevoid and of no effect.  Nothing expressedor referred to in this Agreement will be construed to give any Person, otherthan the parties to this Agreement, any legal or equitable right, remedy orclaim under or with respect to this Agreement or any provision of thisAgreement except such rights as may inure to a successor or permitted assigneeunder this Section 12.6.

 

Section 12.7           Severability.  If any provision of this Agreement is heldinvalid, illegal or unenforceable, the remaining provisions of this Agreementremain in full force and effect, if the essential terms and conditions of thisAgreement for each party remain valid, binding and enforceable.

 

Section 12.8           Exhibits and Schedules.  The Exhibits and Schedules to this Agreementare incorporated herein by reference and made a part of this Agreement.  The Seller Disclosure Schedule is arranged insections and paragraphs corresponding to the numbered and lettered sections andparagraphs of Article 3.  Thedisclosure in any section or paragraph of the Seller

 

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Disclosure Schedule, andthose in any amendment or supplement thereto, will be deemed to relate to eachother provision of Article 3.

 

Section 12.9           Interpretation.  In the negotiation of this Agreement, eachparty has received advice from its own attorney.  The language used in this Agreement is thelanguage chosen by the parties to express their mutual intent, and no provisionof this Agreement will be interpreted for or against either party because thatparty or its attorney drafted the provision.

 

Section 12.10         Expenses.  Except as set forth in this Agreement, eachparty will pay its own direct and indirect expenses incurred by it in connectionwith the preparation and negotiation of this Agreement and the consummation ofthe transactions contemplated by this Agreement, including all fees andexpenses of its advisors and representatives; provided, however,the Purchaser will bear all notarial and similar fees and expenses incurred inconnection with the execution and delivery of any Ancillary Agreement.

 

Section 12.11         Governing Law.  Unless any Exhibit or Schedule specifiesa different choice of law, the internal laws of the State of New York (withoutgiving effect to any choice or conflict of law provision or rule (whetherof the State of New York or any other jurisdiction) that would cause theapplication of laws of any other jurisdiction)****govern all matters arising out of or relating to this Agreement andits Exhibits and Schedules and the transactions contemplated by this Agreement,including its validity, interpretation, construction, performance andenforcement and any disputes or controversies arising therefrom or relatedthereto.

 

Section 12.12         Limitation on Liability.   **NOTWITHSTANDING ANY OTHERPROVISION OF THIS AGREEMENT OR ANY ANCILLARY AGREEMENT TO THE CONTRARY, IN NOEVENT WILL ANY PARTY OR ANY OF ITS AFFILIATES BE LIABLE FOR ANY SPECIAL,INCIDENTAL, INDIRECT, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES (INCLUDINGLOST PROFITS, LOSS OF REVENUE OR LOST SALES) IN CONNECTION WITH ANY CLAIMS,LOSSES, DAMAGES OR INJURIES ARISING OUT OF THE CONDUCT OF SUCH PARTY PURSUANTTO THIS AGREEMENT REGARDLESS OF WHETHER THE NONPERFORMING PARTY WAS ADVISED OFTHE POSSIBILITY OF SUCH DAMAGES OR NOT**.

 

Section 12.13         Jurisdiction and Service of Process.   Except as contemplated by Section 12.3,any action or proceeding arising out of or relating to this Agreement or thetransactions contemplated by this Agreement must be brought only ineither the Bankruptcy Court, while the Case is pending, or thereafter in anyfederal or state court located in New York County, New York (each, a “Chosen Court”).Each of the parties knowingly, voluntarily and irrevocably submits to theexclusive jurisdiction of the Chosen Courts in any such action or proceedingand waives any objection it may now or hereafter have to venue or toconvenience of forum.  Each party to thisAgreement may make service on the other party by sending or delivering a copyof the process to the party to be served at the address and in the mannerprovided for the giving of notices in Section 12.1.  Nothing in this Section 12.13,however, affects the right of a party to serve legal process in any other mannerpermitted by law.

 

Section 12.14         Waiver of Jury Trial.  **EACH OF THE PARTIESKNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTEDBY LAW, ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM(WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TOTHIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR THEACTIONS OF EITHER PARTY TO THIS AGREEMENT IN NEGOTIATION, EXECUTION ANDDELIVERY, PERFORMANCE OR ENFORCEMENT OF THIS AGREEMENT**.

 

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Section 12.15         No Joint Venture.  Nothing in this Agreement creates a jointventure or partnership between the parties. This Agreement does not authorize either party (a) to bind orcommit, or to act as an agent, employee or legal representative of, the otherparty, except as may be specifically set forth in other provisions of thisAgreement, or (b) to have the power to control the activities andoperations of the other party.  Theparties are independent contractors with respect to each other under thisAgreement.  Each party agrees not to holditself out as having any authority or relationship contrary to this Section 12.15.

 

Section 12.16         Counterparts.  The parties may execute this Agreement in multiplecounterparts, each of which constitutes an original as against the party thatsigned it, and all of which together constitute one agreement.  This Agreement is effective upon delivery ofone (1) executed counterpart from each party to the other party.  The signatures of all parties need not appearon the same counterpart.  The delivery ofsigned counterparts by facsimile or email transmission that includes a copy ofthe sending party’s signature(s) is as effective as signing and deliveringthe counterpart in person.

 

[Signature page follows.]

 

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Theparties have executed and delivered this Agreement as of the date indicated inthe first sentence of this Agreement.

 

 
|       | **CHEMTURA CORPORATION**       |
|------------|--------------------------------|
|       |                           |
|       | By:                            |   |
|       |                           | **Name: Stephen C. Forsyth** |
|       |                           | **Title****: Executive Vice  President & Chief Financial Officer** |
|       |                           |
|       |                           |
|       | **SK ATLAS, LLC**              |
|       |                           |
|       | By:                            |   |
| ** ** | ** **                     | **Name: Barry Siadat** |
| ** ** | ** **                     | **Title:   Manager** |
|       |                           |
|       |                           |
|       | **SK CAPITAL PARTNERS II, LP** |
|       |                           |
|       | By:                            | SK Capital Investments II, LLC |
|       |                           | its general partner |
|       |                           |
|       | By:                            |   |
| ** ** | ** **                     | **Name: Barry Siadat** |
| ** ** | ** **                     | **Title:   Manager** |
|            |                                |  |  |

 

74

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