Document:

Exhibit 10.1

Exhibit 10.1

INTERCOMPANY LIQUIDITY AGREEMENT

INTERCOMPANY LIQUIDITY AGREEMENT, effective as of December 31, 2010, by and among (i) The
Hartford Financial Services Group, Inc., a corporation organized under the laws of Delaware
(“HFSG”), in its capacity as (a) a Borrower and a Lender under the Loan Facility and (b) as
administrator for the Subsidiary Borrowers and the Subsidiary Lenders (in such capacity, the
“Administrator”); (ii) each of the Subsidiary Borrowers; and (iii) each of the Subsidiary
Lenders.

WHEREAS, each of the Subsidiary Borrowers and Subsidiary Lenders are subsidiaries of HFSG;

WHEREAS, the parties wish to establish and implement an intercompany liquidity facility
whereby such parties may borrow from or lend to one another in accordance with the terms and
subject to the limitations set forth in this Agreement;

WHEREAS, this Agreement does not establish a commitment to lend funds on the part of any party
hereto; and

NOW, THEREFORE, in consideration of the mutual covenants and obligations set forth in this
Agreement, the parties hereto agree as follows:

	1.	 	DEFINITIONS

	1.1	 	Definitions. As used herein the following terms have the following respective
meanings:

“Administrator” means, as of the date hereof, HFSG in its capacity as such, or any successor
Administrator appointed pursuant to Section 6 of this Agreement.

“Agreement” means this Intercompany Liquidity Agreement as originally executed or as it may
be amended, varied or supplemented from time to time in accordance with the terms hereof,
including, without limitation, as supplemented by Joinder Agreements executed by additional
Subsidiary Borrowers and/or Subsidiary Lenders from time to time.

“Authorized Officers” means a Person’s President; Chief Financial Officer; Treasurer; Senior
Vice President, Corporate Treasury and Banking; or Controller.

“Borrower” or “Borrowers” means, with respect to the Loan Facility, HFSG and each Subsidiary
Borrower.

“Borrowing Request” has the meaning set forth in Section 2.2.

“Business Day” means any day (other than a Saturday or Sunday) on which banks generally are
open for business in Hartford, Connecticut.

 

 

 

“Divested Entity” has the meaning set forth in Section 8.3.

“Dollar” and “$” each means the lawful currency of the United States of America.

“Effective Date” means the date of this Agreement.

“Extended Maturity Date” has the meaning set forth in Section 3.2.

“Extended Maturity Period” has the meaning set forth in Section 3.2.

“HFSG” has the meaning set forth in the Preamble of this Agreement.

“Initial Maturity Date” has the meaning set forth in Section 3.1.

“Joinder Agreement” has the meaning set forth in Section 11.2.

“Lender” or “Lenders” means, with respect to the Loan Facility, HFSG and each Subsidiary
Lender.

“Loan” has the meaning set forth in Section 2.1.

“Loan Documents” means, collectively, this Agreement, the Notes (if any), any Joinder
Agreement and each certificate, agreement or document executed in connection with or
pursuant to any of the foregoing.

“Loan Facility” means the loan facility described in Section 2.1.

“Loan Records” has the meaning set forth in Section 2.3(a).

“Majority Lenders” has the meaning set forth in Section 6.5.

“Maturity Date” has the meaning set forth in Section 3.2.

“Person” means an individual, partnership, corporation (including a business trust), joint
stock company, estate, trust, limited liability company, unincorporated association, joint
venture or other entity.

“Promissory Note” has the meaning set forth in Section 2.3(b).

“Subsidiary” of a Person means a corporation, partnership, joint venture, limited liability
company or other business entity of which a majority of the outstanding voting securities or
similar interests are at the time beneficially owned, or the management of which is
otherwise controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person.

“Subsidiary Borrower” means, with respect to the Loan Facility, each entity that (a) is
listed on the signature pages hereof as a “Subsidiary Borrower” or (b) from time to time
becomes a party hereto by execution of a Joinder Agreement pursuant to Section 11.2.

 

2

 

“Subsidiary Lender” means, with respect to the Loan Facility, each entity that (a) is listed
on the signature pages hereof as a “Subsidiary Lender” or (b) from time to time becomes a
party hereto by execution of a Joinder Agreement pursuant to Section 11.2.

“Taxes” has the meaning set forth in Section 6.2.

	2.	 	THE LOAN FACILITY

	2.1	 	The Loan Facility. On the terms and subject to the conditions contained in this
Agreement, HFSG and each Subsidiary Lender shall consider requests for loans in Dollars (each,
a “Loan”) to any requesting Subsidiary Borrower or from HFSG from time to time during
the period from and including the Effective Date and prior to the earlier of (x) the date this
Agreement is terminated and (y) the date the applicable Borrower’s participation in the Loan
Facility is terminated. Notwithstanding the foregoing, the aggregate principal amount of all
outstanding Loans may not exceed $2,000,000,000. Amounts of Loans repaid may be re-borrowed
under the Loan Facility.

	2.2	 	Borrowing Procedure. In the event that a Borrower wishes to obtain a Loan, such
Borrower shall submit a Borrowing Request in the form of Exhibit A hereto (a “Borrowing
Request”) to HFSG or a Subsidiary Lender. The Borrowing Request shall contain the proposed
terms of the loan, be signed by two Authorized Officers of the Borrower and signed as accepted
by two Authorized Officers of the Lender. In the event any Lender replies in the affirmative
by signing and returning such copy of the Borrowing Request, such Loan will be made in
accordance with the terms set forth in the Borrowing Request.

	2.3	 	Record of Facility.

	 	(a)	 	The Administrator shall maintain loan records (the “Loan Records”) with
respect to the Loan Facility, which records shall include (i) the date of each Loan,
(ii) the name of the applicable Borrower and Lender(s), (iii) the amount of such Loan,
(iv) the applicable interest rate, (v) the Maturity Date, and (vi) such other
information as the Administrator determines in its reasonable judgment. Any party will
have the right to request and inspect the Loan Records at any time.

	 	(b)	 	Each Lender shall open and maintain on its books a loan account in the name of
the applicable Borrower in respect of the Loan Facility which loan account will be
prima facie evidence of the amount of principal and interest due in respect of Loans;
provided that (i) the failure of a Lender to maintain such account or any error
therein will not in any manner affect the obligation of the applicable Borrower to
repay any Loan in accordance with the terms of this Agreement and the Promissory Note
and (ii) if the applicable Borrower disagrees with any calculation or entry of such
loan account, the applicable Borrower and the applicable Lender shall in good faith
attempt to promptly resolve the issue. Notwithstanding the foregoing, at any time, any
Lender in writing may request that the applicable Borrower evidence its obligations
hereunder by execution of a
promissory note, which promissory note will be in substantially in the form of
promissory note attached hereto as Exhibit B (a “Promissory Note”).

 

3

 

	3.	 	MATURITY DATE; EXTENSION; PREPAYMENT

	3.1	 	Maturity Date. Except as otherwise provided herein, each Borrower shall repay the
outstanding principal amount and all accrued interest on each Loan on the maturity date agreed
to by the Borrower and Lender at the time of making of such Loan (the “Initial Maturity
Date”). The Initial Maturity Date for each Loan will be less than or equal to 364 days
from the date the applicable Lender makes such Loan.

	3.2	 	Extension of Maturity Date. Each Borrower shall have the right to request that the
applicable Lender(s) extend the Initial Maturity Date by a period of up to 364 days (the
“Extended Maturity Period”). If such Lender(s) so agree to extend, then the Borrower
shall first pay all interest accrued up to the Initial Maturity Date, and thereafter the
outstanding principal balance of the Note and all interest accruing thereon during the
Extended Maturity Period will become due and payable on the last day of the Extended Maturity
Period (the “Extended Maturity Date”; and together with the Initial Maturity Date, a
“Maturity Date”). Any such extension request and approval may be communicated directly
to the applicable Lender(s) or Borrower, or through the Administrator, and any such extension
that is granted shall be recorded in the Loan Records.

	3.3	 	Voluntary Prepayment. At any time and from time to time, each Borrower will have the
right to make one or more prepayments of the outstanding principal balance of its Loan(s)
without penalty and may designate which Loan is being prepaid if more than one is outstanding,
provided that any such prepayment includes all accrued interest as of the prepayment date on
the principal amount prepaid.

	4.	 	INTEREST

	4.1	 	Interest. Each Loan shall bear interest on the unpaid principal amount thereof from
the date such Loan is made until paid in full at a rate per annum determined in accordance
with Section 2 based on market rates at the time of borrowing. In the even that the Initial
Maturity Date of a Loan is extended in accordance with Section 3.2, the rate of interest for
such extended Loan shall be reset, starting as of the date of extension, as agreed by the
applicable Borrower and Lender based on market interest rates at that time. For purposes
hereof, the unpaid principal amount will be determined based upon the ending balance of
outstanding Loans at the end of the calendar month for which interest is being computed.

	4.2	 	Interest Payments. Interest accrued on each Loan shall be payable in arrears (i) upon
the prepayment thereof in full or in part, (ii) the Initial Maturity Date, and (ii) if
extended, at the Extended Maturity Date of such Loan in accordance with Section 3.2.

	4.3	 	Default Interest Due. If the applicable Borrower fails to pay when due any sum due or
to become due hereunder (whether principal, interest or otherwise), the applicable Borrower
shall pay interest at the rate specified in the Borrowing Request (subject to adjustments
under Section 4.1) plus 2% per annum on the unpaid sum from the date when such sum fell due
up to the date of actual payment thereof in full to the applicable Lender.

 

4

 

	5.	 	PAYMENT MECHANICS

	5.1	 	Making of Payments. All payments to be made by any Borrower to any Lender under this
Agreement shall be made, in Dollars, on the applicable payment date in immediately available
funds for credit to the account of such Lender at such bank as the Administrator may from time
to time designate.

	5.2	 	Set off, Counterclaim, Tax Gross-up. All payments to be made by any Borrower under
this Agreement shall be made without set off or counterclaim and free from, and without
deduction for, any present or future taxes, levies, imposts, duties, charges, fees, deductions
or withholdings of any nature imposed, levied, collected, withheld or assessed by any taxing
authority (collectively, “Taxes”) unless the applicable Borrower is compelled by law
to make payments subject to Taxes in which event the applicable Lender may require (a) full
repayment of the Loans owing to it from such Borrower (together with all other sums due
hereunder); or (b) payment by such Borrower of such additional amounts as may be necessary to
ensure that the applicable Lender receives a net amount equal to the full amount it would have
received with respect to such Loans had payment not been made subject to Taxes.

	5.3	 	Payments on Non-Business Days. Whenever any payment hereunder shall become due on a
day which is not a Business Day, the due date thereof shall be the next succeeding Business
Day, unless the operation of this section would cause the due date to be moved to the
following calendar year, in which case such due date will be the next preceding Business Day.
The amount of interest payable will be adjusted accordingly.

	6.	 	ADMINISTRATION

	6.1	 	Each Subsidiary Lender and each Subsidiary Borrower hereby appoints HFSG as the Administrator
hereunder and authorizes the Administrator to take such action as Administrator on its behalf
and to exercise such powers under this Agreement and the other Loan Documents as are delegated
to the Administrator under such agreements and to exercise such powers as are reasonably
incidental thereto, including the calculation of interest on the Loans and the maintenance of
the Loan Records. Without limiting the foregoing:

(i) Each Subsidiary Lender appoints Administrator as its administrator to determine and
undertake any necessary or appropriate action in connection with the Loan Facility as the
Administrator may from time to time determine;

(ii) Each Subsidiary Borrower appoints Administrator as its administrator to determine and
undertake any necessary or appropriate action in connection with the Loan Facility as the
Administrator may from time to time determine; and

(iii) To the extent HFSG is replaced as Administrator pursuant to Section 6.5 hereunder,
HFSG appoints the replacement Administrator as its administrator to
determine and undertake any necessary or appropriate action in connection with the Loan
Facility as the Administrator may from time to time determine.

 

5

 

	6.2	 	As to any matters not expressly provided for by this Agreement and the other Loan Documents,
the Administrator will not be required to exercise any discretion or take any action.

	6.3	 	The Administrator does not assume nor will be deemed to have assumed any obligation other
than as expressly set forth herein and in the other Loan Documents or any other relationship
as the Administrator, fiduciary or trustee of or for any party hereto.

	6.4	 	The Administrator may resign at any time by giving written notice thereof to each party
hereto. Upon any such resignation, a majority of the Lenders (the “Majority Lenders”)
shall have the right to appoint a successor Administrator. If no successor Administrator shall
have been so appointed by the Majority Lenders, and shall have accepted such appointment,
within 30 days after the retiring Administrator’s giving of notice of resignation, then the
retiring Administrator may, on behalf of the Lenders and the Borrowers, appoint a successor
Administrator. In either case, such appointment shall be subject to the prior written approval
of HFSG. Upon the acceptance of any appointment as Administrator by a successor Administrator,
such successor Administrator shall succeed to, and become vested with, all the rights, powers,
privileges and duties of the retiring Administrator, and the retiring Administrator shall be
discharged from its duties and obligations, as Administrator, under this Agreement and the
other Loan Documents. Prior to any retiring Administrator’s resignation hereunder as
Administrator, the retiring Administrator shall take such action as may be reasonably
necessary to assign to the successor Administrator its rights as Administrator under the Loan
Documents (or, if no such successor Administrator has been appointed, then to the Majority
Lenders). After such resignation, the retiring Administrator shall continue to have the
benefit of Section 6.1 as to any actions taken or omitted to be taken by it while it
was Administrator under this Agreement and the other Loan Documents.

	7.	 	REPRESENTATIONS AND WARRANTIES

	7.1	 	Representations and Warranties. Each Borrower represents and warrants to applicable
Lender(s) as set forth below on the date hereof and as of the date of each Loan that:

	 	(a)	 	The Borrower is a company duly organized under its jurisdiction of formation
and is validly existing and has full power, authority and legal right to enter into,
deliver and perform this Agreement and to borrow the Loans, and the execution, delivery
and performance of this Agreement and the borrowing of the Loans by the Borrower have
been duly authorized by all necessary corporate or other action on its part.

	 	(b)	 	This Agreement constitutes the legal, valid and binding obligations of the
Borrower, enforceable against it in accordance with its terms, except as limited by
bankruptcy, insolvency, or other laws of general application relating to the
enforcement of creditors’ rights and general principles of equity.

 

6

 

	 	(c)	 	The execution, delivery and performance of this Agreement and the borrowing of
the Loans do not contravene any provision of its governing documents, any treaty,
statute, law, governmental rule, regulation, statutory instrument or order, or any
instrument or agreement to which it is a party or which is binding upon it or any of
its assets.

	 	(d)	 	No order, consent, adjudication, approval, license, authorization, or
validation of, or filing, recording or registration with, or exception by, or other
action in respect of any authority or body which has not been obtained by the Borrower
in connection with the execution, delivery and performance of this Agreement or the
borrowing of the Loans will affect the legality, validity, binding effect or
enforceability of this Agreement or any other Loan Document.

	8.	 	TERMINATION

	8.1	 	Termination Date. The initial term of this Agreement shall end December 31, 2020 and
shall be extended automatically for successive ten (10) year terms unless at least thirty (30)
days before the end of any term the parties send written notice to each other that they do not
want this Agreement to renew.

	8.2	 	Voluntary Termination. Any Subsidiary Borrower or Subsidiary Lender may at any time
terminate its participation in the Loan Facility upon at least thirty (30) days’ written
notice to the Administrator. Such notice shall indicate the date that such termination shall
become effective. All amounts owing by such terminating Borrower under any Loan shall be
repaid in full on or before such termination date. The Administrator shall notify the
Connecticut Insurance Department if participation by a Subsidiary Borrower or Subsidiary
Lender is terminated under this Section 8.2.

	8.3	 	Mandatory Termination. In the event that any Subsidiary Borrower or Subsidiary Lender
ceases to be a direct or indirect Subsidiary of HFSG (a “Divested Entity”), (i) such
Divested Entity shall immediately repay any amounts owing under the Loan Facility and (ii)
such Divested Entity will cease to be a Subsidiary Lender or Subsidiary Borrower hereunder.
Upon the occurrence of the events contemplated by this Section, the Divested Entity will be
deemed to have waived and released each other party hereto, including the Administrator, for
any and all claims such Divested Entity may have arising out of or in connection with this
Agreement. The Administrator shall notify the Connecticut Insurance Department if
participation by a Subsidiary Borrower or Subsidiary Lender is terminated under this Section
8.3.

	8.4	 	Termination Due to Illegality. If any law, regulation or regulatory requirement makes
it unlawful for any Lender, any Borrower or the Administrator to perform any of their
respective obligations hereunder, then this Agreement will be terminated and the applicable
Borrowers shall repay to the applicable Lenders all Loans owing to such Lenders on such date
as may be required by the relevant law or regulatory requirement, together with all accrued
interest thereon and any other amounts payable by such Borrowers hereunder.

 

7

 

	9.	 	INDEMNITY

	9.1	 	Indemnity. Each Subsidiary Borrower and Subsidiary Lender shall, jointly and
severally, indemnify the Administrator against all losses, expenses and liabilities that the
Administrator may sustain or incur as a consequence of the entering into, performance and
enforcement of this Agreement by the Administrator, except for any losses, expenses and
liabilities arising from the Administrator’s gross negligence or willful misconduct. The
Subsidiary Borrowers and Subsidiary Lenders shall allocate such amounts among themselves on a
reasonable basis.

	10.	 	EXPENSES

	10.1	 	Expenses. To the extent a Borrower defaults on payment of principal or interest on a
Loan, the defaulting Borrower shall pay or reimburse the applicable Lender for all reasonable
charges and expenses (including legal fees) incurred by such Lender in connection with the
enforcement of and collections under this Agreement or in preserving any of its rights under
this Agreement.

	11.	 	ASSIGNMENT; JOINDER

	11.1	 	Assignment. Subject to Section 8.3, this Agreement (i) will be binding upon and inure
to the benefit of the Borrowers and the Lenders and their respective successors and permitted
assigns, and (ii) may not be assigned by operation of law or otherwise without the written
consent of all parties hereto and prior written approval of the Connecticut Insurance
Department. Any purported assignment in violation of this Agreement shall be invalid and void.

	11.2	 	Joinder Agreement. In the event that any other Subsidiary of HFSG desires to become a
party hereto, such Subsidiary shall execute and deliver a joinder agreement in substantially
the same form as that certain joinder agreement attached as Exhibit B (a “Joinder
Agreement”) and will thereafter for all purposes be a party hereto and have the same
rights, benefits and obligations as a Subsidiary Borrower and a Subsidiary Lender party hereto
on such date. The Administrator shall notify the Connecticut Insurance Department of the
execution of any Joinder Agreement.

	12.	 	GENERAL

	12.1	 	Governing Law. This Agreement shall be governed by and interpreted in accordance with
the internal laws of the State of Connecticut, without regard to any conflict of laws
provisions.

	12.2	 	Amendments and Waiver. This Agreement may not be amended, revoked, supplemented, or
modified and no provisions of this Agreement may be waived without an agreement in writing of
the parties hereto and prior written approval of the Connecticut Insurance Department. For
the avoidance of doubt, the addition of any other Subsidiary of HFSG as a party to the
Agreement under Section 11.2 will not constitute an amendment, supplement or modification of
the Agreement and will therefore not require approval of the Connecticut Insurance Department.

 

8

 

	12.3	 	Severability. Subject to Section 8.4, any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability without affecting
the validity, legality and enforceability of the remaining provisions hereof in that
jurisdiction or the validity, legality or enforceability of that provision in any other
jurisdiction.

	12.4	 	Counterparts. This Agreement may be executed in two or more counterparts, each of
which will be deemed an original, but all of which together shall constitute one and the same
instrument.

	12.5	 	Survival of Representations. Subject to Section 8.3, all representations and
warranties of the Borrowers contained in this Agreement will survive the making of the Loans
herein contemplated.

	12.6	 	Miscellaneous. This Agreement (i) constitutes the entire agreement between the
parties hereto and supersedes all other prior agreements and understandings, both written and
oral, between the parties with respect to the subject matter hereof; and (ii) is not intended
to and shall not confer upon any other Person, other than the parties hereto, any rights or
remedies with respect to the subject matter hereof.

[Balance of Page Intentionally Left Blank]

 

9

 

IN WITNESS WHEREOF this Agreement has been executed by the duly authorized representatives of
the parties hereto.

	 	 	 	 	 	 	 
	The Hartford Financial Services Group, Inc.	 	 
	 
	 	 	 	 	 	 
	By:	 	/s/ Robert W. Paiano	 	 
	 	 	 	 	 
	 

	 	Name:
	 	Robert W. Paiano	 	 
	 

	 	Title:
	 	Senior Vice President & Treasurer	 	 
	 
	 	 	 	 	 	 
	Subsidiary Lenders and Subsidiary Borrowers	 	 
	 
	 	 	 	 	 	 
	Hartford Accident and Indemnity Company	 	 
	 
	 	 	 	 	 	 
	By:	 	/s/ Robert W. Paiano	 	 
	 	 	 	 	 
	 

	 	Name:
	 	Robert W. Paiano	 	 
	 

	 	Title:
	 	Senior Vice President & Treasurer	 	 
	 
	 	 	 	 	 	 
	Hartford Fire Insurance Company	 	 
	 
	 	 	 	 	 	 
	By:	 	/s/ Robert W. Paiano	 	 
	 	 	 	 	 
	 

	 	Name:
	 	Robert W. Paiano	 	 
	 

	 	Title:
	 	Senior Vice President & Treasurer	 	 
	 
	 	 	 	 	 	 
	Hartford Insurance Company of the Southeast	 	 
	 
	 	 	 	 	 	 
	By:	 	/s/ Robert W. Paiano	 	 
	 	 	 	 	 
	 

	 	Name:
	 	Robert W. Paiano	 	 
	 

	 	Title:
	 	Senior Vice President & Treasurer	 	 
	 
	 	 	 	 	 	 
	Hartford International Life Reassurance Company	 	 
	 
	 	 	 	 	 	 
	By:	 	/s/ Robert W. Paiano	 	 
	 	 	 	 	 
	 

	 	Name:
	 	Robert W. Paiano	 	 
	 

	 	Title:
	 	Senior Vice President & Treasurer	 	 
	 
	 	 	 	 	 	 
	Hartford Life and Accident Insurance Company	 	 
	 
	 	 	 	 	 	 
	By:	 	/s/ Robert W. Paiano	 	 
	 	 	 	 	 
	 

	 	Name:
	 	Robert W. Paiano	 	 
	 

	 	Title:
	 	Senior Vice President & Treasurer	 	 

 

10

 

	 	 	 	 	 	 	 
	Hartford Life and Annuity Company	 	 
	 
	 	 	 	 	 	 
	By:	 	/s/ Robert W. Paiano	 	 
	 	 	 	 	 
	 

	 	Name:
	 	Robert W. Paiano	 	 
	 

	 	Title:
	 	Senior Vice President & Treasurer	 	 
	 
	 	 	 	 	 	 
	Hartford Life Insurance Company	 	 
	 
	 	 	 	 	 	 
	By:	 	/s/ Robert W. Paiano	 	 
	 	 	 	 	 
	 

	 	Name:
	 	Robert W. Paiano	 	 
	 

	 	Title:
	 	Senior Vice President & Treasurer	 	 
	 
	 	 	 	 	 	 
	Hartford Underwriters Insurance Company	 	 
	 
	 	 	 	 	 	 
	By:	 	/s/ Robert W. Paiano	 	 
	 	 	 	 	 
	 	 	Name:	 	Robert W. Paiano 	 
	 	 	Title:	 	Senior Vice President & Treasurer	 
	 
	 	 	 	 	 	 
	Nutmeg Insurance Company	 	 
	 
	 	 	 	 	 	 
	By:	 	/s/ Robert W. Paiano	 	 
	 	 	 	 	 
	 

	 	Name:
	 	Robert W. Paiano	 	 
	 

	 	Title:
	 	Senior Vice President & Treasurer	 	 
	 
	 	 	 	 	 	 
	Pacific Insurance Company, Limited	 	 
	 
	 	 	 	 	 	 
	By:	 	/s/ Robert W. Paiano	 	 
	 	 	 	 	 
	 

	 	Name:
	 	Robert W. Paiano	 	 
	 

	 	Title:
	 	Senior Vice President & Treasurer	 	 
	 
	 	 	 	 	 	 
	Sentinel Insurance Company, Ltd.	 	 
	 
	 	 	 	 	 	 
	By:	 	/s/ Robert W. Paiano	 	 
	 	 	 	 	 
	 

	 	Name:
	 	Robert W. Paiano	 	 
	 

	 	Title:
	 	Senior Vice President & Treasurer	 	 

 

11

 

	 	 	 	 	 	 	 
	Trumbull Insurance Company	 	 
	 
	 	 	 	 	 	 
	By:	 	/s/ Robert W. Paiano	 	 
	 	 	 	 	 
	 

	 	Name:
	 	Robert W. Paiano	 	 
	 

	 	Title:
	 	Senior Vice President & Treasurer	 	 
	 
	 	 	 	 	 	 
	American Maturity Life Insurance Company	 	 
	 
	 	 	 	 	 	 
	By:	 	/s/ Robert W. Paiano	 	 
	 	 	 	 	 
	 

	 	Name:
	 	Robert W. Paiano	 	 
	 

	 	Title:
	 	Senior Vice President & Treasurer	 	 

 

12

 

Exhibit A

Form of Borrowing Request

BORROWING REQUEST

[LENDER]

[ADDRESS]

Attention: Office of Corporate Treasury

Ladies and Gentlemen:

This Borrowing Request is delivered to you pursuant to Section 2.2 of the Intercompany
Liquidity Agreement, dated as of December 31, 2010 (as the same may be amended, restated,
supplemented or otherwise modified from time to time, the “Intercompany Liquidity
Agreement”), by and among The Hartford Financial Services Group, Inc., each of the Subsidiary
Borrowers listed on the signature pages thereof, each of the Subsidiary Lenders listed on the
signature pages thereof and the other Subsidiary Lenders or Subsidiary Borrowers that from time to
time become party thereto. Unless otherwise defined herein or the context otherwise requires, terms
used herein have the meanings provided in the Intercompany Liquidity Agreement.

The undersigned Borrower hereby requests that a Loan be made on or about [PROPOSED FUNDING
DATE] in the principal amount of $                    , with an Initial Maturity Date of on or about [DATE
THAT IS 364 OR FEWER DAYS AFTER PROPOSED FUNDING DATE] and accruing interest at a rate of
_____% per
annum [PROPOSED RATE, WHICH SHALL BE BASED ON MARKET RATES AT THE TIME OF FUNDING].

The Borrower hereby acknowledges that each of the delivery of this Borrowing Request and the
acceptance by the Borrower of the proceeds of the Loan requested hereby constitute a representation
and warranty by the Borrower that, on the date of such Loan, and before and after giving effect
thereto and to the application of the proceeds therefrom, all statements set forth in Section 7.1
of the Intercompany Liquidity Agreement are true and correct.

The Borrower agrees that if prior to the time of the Loan requested hereby any matter
certified to by them herein will not be true and correct at such time as if then made, they will
immediately so notify the Administrator. Except to the extent, if any, that prior to the time of
the Loan requested hereby the Lender shall have received written notice to the contrary from the
Borrower, each matter certified to herein shall be deemed once again to be certified as true and
correct as of the date the Loan is made as if then made.

Please indicate your acceptance of this Borrowing Request by countersigning below.

 

 

 

The undersigned Borrower has caused this Borrowing Request to be executed and delivered, and
the certification and warranties contained herein to be made, by its duly Authorized Officers
this _____ day of                     , 20_.

	 	 	 	 	 
	 	[BORROWER]

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

ACCEPTANCE BY LENDER

The undersigned Lender agrees to make all or a portion of the Loan requested above in accordance
with the Intercompany Liquidity Agreement, and has caused this Borrowing Request to be executed and
delivered by its duly Authorized Officers this _____ day of ____, 20_.

	 	 	 	 	 	 	 
	[LENDER]	 	 
	 
	 	 	 	 	 	 
	By:	 	 	 	 
	 	 	 	 	 
	 

	 	Name:
	 	 	 	 
	 

	 	Title:
	 	 	 	 
	 
	 	 	 	 	 	 
	By:	 	 	 	 
	 	 	 	 	 
	 

	 	Name:
	 	 	 	 
	 

	 	Title:
	 	 	 	 

 

A-2

 

Exhibit B

Form of Promissory Note

REVOLVING NOTE

			
	 	 	 
	Lender: [                    ] 

Principal Amount: $[                    ]

Maturity Date: [                    ]

	 	Hartford, Connecticut

FOR VALUE RECEIVED, the undersigned, [BORROWER], a [Delaware] [Connecticut] corporation (the
“Borrower”), hereby promises to pay to the order of the Lender set forth above (the
“Lender”) the Principal Amount set forth above, or, if less, the aggregate unpaid principal
amount of the Loan (as defined in the Intercompany Liquidity Agreement referred to below) of the
Lender to the Borrower, payable at such times, and in such amounts, as are specified in the
Intercompany Liquidity Agreement.

Such Borrower promises to pay interest on the unpaid principal amount of such Loan from the
date made until such principal amount is paid in full, at such interest rates, and payable at such
times, as are specified in the Intercompany Liquidity Agreement.

Both principal and interest are payable in Dollars to [LENDER], under the Intercompany
Liquidity Agreement, at [ADDRESS], in immediately available funds.

Interest shall accrue on this note at a rate of [RATE], subject to adjustment in connection
with the extension of the Maturity Date pursuant to Section 3.2 of the Intercompany Liquidity
Agreement.

This Note is one of the Notes referred to in, and is entitled to the benefits of, the
Intercompany Liquidity Agreement, dated effective as of December 31, 2010 (as the same may be
amended, restated, supplemented or otherwise modified from time to time, the “Intercompany
Liquidity Agreement”), by and among The Hartford Financial Services Group, Inc.
(“HFSG”), each of the Subsidiary Borrowers listed on the signature pages thereof, each of
the Subsidiary Lenders listed on the signature pages thereof and the other Subsidiary Lenders or
Subsidiary Borrowers which from time to time become party thereto. Capitalized terms used herein
and not defined herein shall have the same meaning given to such terms in the Intercompany
Liquidity Agreement.

Demand, diligence, presentment, protest and notice of non-payment and protest are hereby
waived by the Borrower.

This Note shall be governed by, and construed and interpreted in accordance with, the law of
the State of Connecticut.

 

 

 

IN WITNESS WHEREOF, the Borrower has caused this Note to be executed and delivered by its duly
authorized officer as of the day and year and at the place set forth above.

	 	 	 	 	 	 	 
	[BORROWER],	 	 
	as Borrower	 	 
	 
	 	 	 	 	 	 
	By:	 	 	 	 
	 	 	 	 	 
	 

	 	Name:
	 	 	 	 
	 

	 	Title:
	 	 	 	 

 

B-2

 

Exhibit C

Form of Joinder Agreement

JOINDER AGREEMENT

This JOINDER AGREEMENT, dated as of                     ,
20_____, is delivered pursuant to Section 11.2
of the Intercompany Liquidity Agreement, dated effective as of December 31, 2010 (the
“Intercompany Liquidity Agreement”), by and among The Hartford Financial Services Group,
Inc. (“HFSG”), each of the Subsidiary Borrowers listed on the signature pages thereof, each
of the Subsidiary Lenders listed on the signature pages thereof and the other Subsidiary Lenders or
Subsidiary Borrowers which from time to time become party thereto. Capitalized terms used herein
and not defined herein shall have the same meaning given to such terms in the Intercompany
Liquidity Agreement.

By executing and delivering this Joinder Agreement, the undersigned, as provided in Section
11.2 of the Intercompany Liquidity Agreement, hereby becomes a party to the Intercompany Liquidity
Agreement as a Subsidiary Lender and Subsidiary Borrower thereunder with the same force and effect
as if originally named as a Subsidiary Lender and Subsidiary Borrower therein.

The undersigned hereby represents and warrants that each of the representations and warranties
contained in Section 7.1 (Representations and Warranties) of the Intercompany Liquidity Agreement
applicable to it is true and correct on and as the date hereof as if made on and as of such date.

This Joinder Agreement and the rights and obligations of the parties hereto shall be governed
by, and construed and interpreted in accordance with, the laws of the State of Connecticut.

 

 

 

IN WITNESS WHEREOF, the undersigned has caused this Joinder Agreement to be duly executed and
delivered as of the date first above written.

	 	 	 	 	 	 	 
	[ADDITIONAL SUBSIDIARY BORROWER],	 	 
	as Subsidiary Borrower	 	 
	 
	 	 	 	 	 	 
	By:	 	 	 	 
	 	 	 	 	 
	 

	 	Name:
	 	 	 	 
	 

	 	Title:
	 	 	 	 

	 	 	 	 	 	 	 
	[ADDITIONAL SUBSIDIARY LENDER],	 	 
	as Subsidiary Lender	 	 
	 
	 	 	 	 	 	 
	By:	 	 	 	 
	 	 	 	 	 
	 

	 	Name:
	 	 	 	 
	 

	 	Title:
	 	 	 	 

 

C-2Exhibit 10.1

Exhibit 10.1

QUOTA PURCHASE AND SALE AGREEMENT

By this private instrument, the parties:

ICO POLYMERS DO BRASIL LTDA., a company duty organized and existing under the laws of Brazil,
registered in the Commercial Registry of the State of Minas Gerais under NIRE number 3120537525-7,
dated of 02.13.1998, and enrolled in the CNPJ/MF under the number 02.376.055/0001-26, with its head
office at Via Expressa de Contagem, 2785, Cinco Perobas, Contagem, MG, CEP 32.370-485, herein
represented by its sole Director, Mr. Paulo Cesar Palhares, Brazilian, married, economist, bearer
of ID Card MG 305.392-55P/MG, enrolled in the Taxpayers’ Registry (CPF/MF) under no.
126.931.976-00, residing and domiciled in the City of Belo Horizonte, State of Minas Gerais, at Rua
Cristina, 433, apt. 901, Carmo, CEP 30.310-800, hereinafter referred to as “Purchaser”;

HENRI HARA, Brazilian, married, industrialist, bearer of ID Card RG no. 5.081.389-55P/5P, enrolled
in the Taxpayers’ Registry (CPF/MF) under no. 494.695.928-91, residing and domiciled in the City of
Sao Paulo, State of Sao Paulo, at Rua Barao de Bocaina, 140, apt. 111, Pacaembu, CEP 01241-020; and
ELIE HARA, Brazilian, divorced, industrialist, bearer of ID Card RG no. 4.597.997-55P/5P, enrolled
in the Taxpayers’ Registry (CPF/MF) under no. 173.032.498-34, residing and domiciled in the City of
Sao Paulo, State of Sao Paulo, at Rua Barao de Bocaina, 112, apt. 141, Pacaembu, CEP 01241-020,
both hereinafter referred to as “Sellers”;

and, as Intervening Party and Guarantor, A. SCHULMAN, INC., a company duly incorporated under the
laws of Ohio, USA, headquartered at 3550 W. Market St., Akron, Ohio 44333, herein represented by
its [position], Mr./Mrs. [name and qualification], hereinafter referred to as “A.
Schulman”;

Purchaser, Sellers and A. Schulman are hereinafter collectively referred to as “Parties” and
individually as “Party”;

WHEREAS:

A. Sellers are the owners of a total of 6.330.000 (six million and three hundred and thirty
thousand) quotas, in a proportion of 50% (fifty per cent) each, representing 100% (one hundred per
cent) of the capital stock of MASH INDÚSTRIA E COMÉRCIO DE COMPOSTOS PLÁSTICOS LTDA., a company
duly organized and existing under the laws of Brazil, registered in the Commercial Registry of the
State of Sao Paulo under NIRE number 3521568918-5 and enrolled in the CNPJ/MF under the number
03.125.730/0001-07, with its head office at Avenida Marechal Tito, 6.829, Blocos 5 e 6, Bairro
Itaim Paulista, CEP 08115-100, in the City of Sao Paulo, State of Sao Paulo (hereinafter
“Company”);

B. A. Schulman submitted to Sellers a Letter of Intention with Valuation for Purchase of Stock,
dated of September 9, 2010, where A. Schulman declared its intention to acquire the quotas held by
Sellers in the Company, which would be confirmed after completion of a legal, financial and
business detailed investigation conducted by A. Schulman in the Company;

 

 

 

C. the results of the due diligence conducted by A. Schulman in the Company were very satisfactory
and it decided to proceed with the acquisition of the Company;

D. Purchaser is a Brazilian company that has been recently acquired by A. Schulman and now belongs
to its economic group; and

E. A. Schulman wishes to use the Purchaser to acquire the Company’s quotas from the Sellers;

NOW, THEREFORE, the Parties, in mutual agreement, decide to enter into this Quota Purchase and Sale
Agreement, hereinafter “Agreement”, as per the terms and conditions herein set forth:

SECTION 1. DEFINITIONS

For the purpose of this Agreement the following expressions shall have the definitions attributed
to them below:

Purchaser: means ICO POLYMERS DO BRASIL LTDA., as qualified above.

Agreement: means the present Agreement entered by and between the Purchaser and the Sellers.

Escrow Account(s): means the two accounts of restricted use to be opened one for each of the
Sellers as per the terms and conditions of the Escrow Agreement(s) and in which parts of the
Purchase Price will be deposited, as per Section 3.

Closing Date: means November 3, 2010.

Purchase Price: has the meaning defined in item 3.1.

Quotas: means the 6.330.000 (six million and three hundred and thirty thousand) quotas,
representing 100% (one hundred per cent) of the capital stock of MASH INDÚSTRIA E COMÉRCIO DE
COMPOSTOS PLÁSTICOS LTDA. held by Sellers.

Company: means MASH INDÚSTRIA E COMÉRCIO DE COMPOSTOS PLÁSTICOS LTDA., as qualified above.

Sellers: means Mr. Henri Hara and Mr. Elie Hara, as qualified above.

SECTION 2. PURPOSE

2.1. Subject to the terms and conditions of this Agreement, by this Agreement and in the best terms
of the law, Sellers hereby irrevocably and irreversibly undertake to sell and transfer the Quotas
to the Purchaser, and the Purchaser undertakes to purchase the Quotas from the Sellers, with all
rights and obligations that such Quotas represent, in the Closing Date.

 

 

 

2.1.1. Sellers represent and warrant to Purchaser that the Company’s Quotas to be transferred on
the Closing Date, represent, on that date, 100% of the corporate capital of the Company and will be
transferred free and clear of any liens or encumbrances.

2.2. Sellers will assign and transfer the Quotas to Purchaser on the Closing Date upon signing of
the respective Amendment to the Articles of Association of the Company.

SECTION 3. PRICE AND PAYMENT CONDITIONS

3.1. Regarding the acquisition of the Quotas by the Purchaser from the Sellers described on Section
2 above, Purchaser will pay to Sellers a total amount of R$27.600.000,00 (twenty seven million and
six hundred thousand reais) (“Purchase Price”).

3.2. The payment of the Purchase Price will observe the following conditions:

(i) R$24.800.000,00 (twenty four million and eight hundred thousand reais) shall be payable in cash
to Sellers by wire transfer on the Closing Date, in a proportion of 50% (fifty per cent) for each
of them, observed the condition described on item 3.2.1 below; and

(ii) the remaining R$2.800.000,00 (two million and eight hundred thousand reais) will be payable to
the Sellers on November 3, 2013, according to the terms and conditions set forth on item 3.2.2
below (“Earn-out and Escrow Payment”).

3.2.1. Although the amount foreseen on item 3.2(i) is due only at the Closing Date, Purchaser must,
on the present date, deposit part of that amount equivalent to R$5.000.000,00 (five million reais)
in two Escrow Accounts, one for each Seller, in the proportion of 50% (fifty per cent) each, as a
down payment and guarantee of its intention to purchase the Quotas according to the terms of this
Agreement.

3.2.1.1. Once the related documents foreseen on Section 7 below are duly signed by the Parties,
Sellers must have the right to withdraw or have transferred to their benefit the amount mentioned
above. The balance due at the Closing Date, which is R$19.800.000,00 (nineteen million and eight
hundred thousand reais) must be paid in cash to Sellers concurrently to the signature of the
related documents, in accordance with item 3.2(i) above.

3.2.2. The amount of the Earn-out and Escrow Payment mentioned in item 3.2(ii) above will be
deposited in the Escrow Accounts on the Closing Date, one for each Seller, in the proportion of 50%
(fifty per cent) each, in order to guarantee to Purchaser the contingencies and performance as
mentioned below.

3.2.2.1. The deposited funds will be used as a guarantee, for the Purchaser, to the achievement of
80% capacity utilization of the recently-added third extrusion line in addition to full capacity
utilization of the two initial extrusion lines.

3.2.2.2. For purposes of the Earn-out, “80% capacity utilization” and “full capacity utilization”
shall be defined in accordance with Exhibit 3.2.2.2, which shall be mutually agreed upon and
attached to this Agreement as a condition of the Closing.

 

 

 

3.2.2.3. Besides the aforementioned, the funds of the Earn-out and Escrow Payment may be used to
realize contingent liabilities of the Company and breach of representations and warrants by the
Sellers, according to the responsibilities as defined in Section 8.

3.2.2.4. At the due date mentioned in item 3.2(ii) above, once achieved by the Company the capacity
stated in item 3.2.2.1, Sellers shall have the total amount of the Earn-out and Escrow Payment or
what is left of it, in case the funds are used for contingencies according to Section 8, released
to their designated bank accounts.

3.3. The amount object of the item 3.2(ii) shall have its maturity accelerated in case Purchaser,
for any reason whatsoever, ceases to be a company of A. Schulman’s economic group.

SECTION 4. SELLER’S REPRESENTATIONS AND WARRANTS

4.1. Sellers make the following representations and warrants, and shall be liable for any omission,
inaccuracy or untruthfulness in such representations, which shall remain valid on the Closing Date,
as follows:

4.1.1. Good standing. The Company is a limited company duly organized, validly existing
and in good standing under the laws of Brazil and Sellers have all necessary powers to execute and
perform this Agreement.

4.1.2. Enforceability. This Agreement, and any other agreements or documents executed and
delivered by Sellers in connection with this Agreement, constitute legal, valid and binding
obligations, enforceable in accordance with their respective terms. Sellers’ execution and
performance of this Agreement will not violate or constitute a default, or a condition that, if
continued, with the passage of time or notice would constitute a default, under any other agreement
to which Sellers are a party, or constitute a fraudulent conveyance or fraudulent transfer under or
violate any statute or law or any judgment, decree, order, regulation or rule of any court or
governmental entity to which Sellers are subject to. Sellers are neither party to nor bound by or
subject to any agreement or instrument, or any judgment, order or decree of any court or
governmental agency or authority, which would be violated by, or could prevent or materially
impair, the carrying out of this Agreement nor are party to any pending, or knows of any
threatened, action, suit, proceeding or investigation in, before or by any court, governmental
agency or authority or arbitrator which would have a material adverse effect on this Agreement, the
Quotas or the Company’s business.

4.1.3. Authorizations. Except for any required income tax filings, no prior authorization
or approval of, or filing with, any governmental, regulatory or administrative body that has not
been obtained or made is required in connection with the execution, delivery and performance by
Sellers of this Agreement or any other agreements signed in connection with this Agreement.

4.1.4. Purchased Quotas. The Quotas consist of 100% of the Company’s corporate capital
and, therefore, includes all the assets, properties, agreements and rights necessary for Purchaser
to continue Sellers’ business and activities in the same manner as it has been conducted by Sellers
prior to the Closing Date. The Quotas are free and clear of all liens, claims, security interests
or encumbrances.

 

 

 

4.1.5. Intellectual Property. Exhibit 4.1.5 to this Agreement lists all patents, patent
applications, copyrights, trademarks, service marks, names and internet domain names that have been
registered or applied for on behalf of the Company. To the best of Sellers’ knowledge: (a)
Company’s past activities have not infringed any patent, trade secret, trademark or other
intellectual property right of any third party and Company’s operations have not interfered with,
infringed upon, misappropriated or otherwise come into conflict with the proprietary rights of any
other third party or involved any acts of unfair competition and no claims have been asserted by
any party alleging such interference, infringement, misappropriation, conflict or act of unfair
competition; (b) all of the patents, trademarks, service marks and copyrights listed on Exhibit
4.1.5 are valid and enforceable; and (c) there are no proprietary rights developed by any current
or former director, officer, consultant or employee of the Company that have not been duly and
validly transferred to it, or are not owned free and clear of any liens or encumbrances by the
Company.

4.1.5.1. Besides the warrants described above, Purchaser is aware that, specifically regarding the
trademark “Mash”, it is registered on behalf of third parties under other classes and
classifications, other than the ones related to the Company’s business and activities, and,
therefore, they are not included nor have any connection whatsoever with this Agreement.

4.1.6. Inventories. Sellers will provide to Purchaser an accurate and updated listing of
the Company’s inventories prior to the Closing Date. All inventories are in good condition,
suitable for use and/or consumption and are in a saleable condition on the date hereof. Sellers
represent and warrant that inventories and production lines are viable and satisfy all requirements
for production in accordance with law.

4.1.7. Accounts Receivable. Sellers will provide to Purchaser prior to the Closing Date an
updated and accurate listing of all Company’s accounts receivable.

4.1.8. Tangible Property. Sellers will provide to Purchaser prior to the Closing Date an
updated and accurate listing of the Company’s equipment, machinery, furniture, tooling, furnishings
and other material items of tangible property other than inventory.

4.1.9. Accounts Payable. Sellers will provide to Purchaser prior to the Closing Date an
updated and accurate listing of the Company’s accounts payable for existing open purchase orders to
purchase Company’s inventory. All the obligations of the Company are recorded in the respective
mandatory accounting books, pursuant to generally accepted and consistently applied accounting
principles in Brazil.

4.1.10. Financial Information. Balance sheets, income statements and related financial
information of the Company as of the end of and for calendar years requested, which are complete
and accurate in all material respects and pursuant to generally accepted and consistently applied
accounting principles in Brazil, have already been provided by Sellers to Purchaser. All the
obligations of the Company are recorded in the respective mandatory accounting books, pursuant to
generally accepted and consistently applied accounting principles in Brazil.

4.1.11. Compliance with laws. The operations of the Company, up to the date hereof, have
been carried out in strict compliance with applicable law and have been posted in the
mandatory accounting books. The Sellers will continue to observe this compliance from the present
date to the Closing Date.

 

 

 

4.1.12. Environmental Matters. There are no actions, proceedings or investigations pending
with regard to any ejectment, unloading, leakage, issue, injection, exhaust, deposit or launching
in or of the Company into the environment or third-party properties of any toxic or dangerous
substances, as defined in the pertinent municipal, state or federal regulations, permits,
ordinances, normative rulings, laws or legislation. The Company have not been served notice or
notified with relation to any litigation, claims or environmental conflicts. Sellers hereby assume
liability for the representations and warrants rendered hereunder, and undertake to reimburse the
Purchaser for all present or future obligations and contingencies of an environmental nature in
relation to the Company with respect to events occurring prior to this date and that may be charged
to Purchaser and/or the Company during the term mentioned in Section 8.

4.1.13. Consents to Transfers of Agreements. If necessary, due to the change of control of
the Company, Sellers shall cooperate and use reasonable efforts to obtain any required consent of
third parties regarding the agreements signed by the Company and that are presently valid and in
force.

4.1.14. Labor. Purchaser, in its sole discretion, may offer or decline to offer employment
to any or all of Company’s employees or independent contractors. Sellers will be liable for and
will indemnify Purchaser against all and any compensation and other benefits owed to such employees
or independent contractors on account of their employment by the Company or termination of their
employment or independent contractor relationship. The responsibilities of the Sellers described
herein will be limited to claims originated or based in facts occurred up to the Closing Date and
that may arise during the term mentioned in Section 8.

4.2. Sellers will conduct the operations and activities of the Company from the present date to the
Closing Date as they have been doing so far, without any alteration whatsoever, and will also not
sell or acquire any asset of the Company nor assume any obligation on behalf of the Company or
third parties which are not related to the normal course of Company’s activities.

4.3. Sellers must immediately inform Purchaser of any new fact which arises from the present date
up to the Closing Date and that could alter any of the aforementioned representations and warrants.
In case there is no communication whatsoever prior to the Closing Date, Purchaser will consider
that the representations and warrants made herein remain valid and in force.

SECTION 5. PURCHASER’S REPRESENTATIONS AND WARRANTS

5.1. Purchaser makes the following representations and warrants, and shall be liable for any
omission, inaccuracy or untruthfulness in such representations, which shall remain valid at the
Closing Date, as follows:

5.1.1. Good standing and Approvals. Purchaser is a limited liability company duly
organized, validly existing and in good standing under the laws of the Brazil, and it has obtained
all of the corporate approvals required for the execution of this Agreement, the
consummation of the transactions contemplated herein, the performance of all of its obligations
hereunder.

 

 

 

5.1.2. Enforceability. This Agreement constitutes, and any other agreements or documents
executed and delivered by Purchaser in connection to this Agreement constitutes legal, valid and
binding obligations for the Purchaser, enforceable in accordance with their respective terms.
Purchaser’s execution and performance of this Agreement or any other agreement delivered by
Purchaser in connection with this Agreement, will not violate or constitute a default, or a
condition that, if continued, with the passage of time or notice would constitute a default, under
any agreement to which Purchaser is a party, or constitute a fraudulent conveyance or fraudulent
transfer under or violate any statute or law or any judgment, decree, order, regulation or rule of
any court or governmental entity to which Purchaser is subject.

5.1.2.1. Purchaser (a) is not a party to or bound by or subject to any agreement or instrument, or
any judgment, order, or decree of any court or governmental agency or authority, which would be
violated by, or could prevent or materially impair, the carrying out of this Agreement; and (b) is
not a party to any pending, and does not know of any threatened, action, suit, proceeding or
investigation in, before or by any court, governmental agency or authority or arbitrator which
would have a material adverse effect on this Agreement.

SECTION 6. INTERVENING PARTY

6.1. A. Schulman signs the present Agreement as an Intervening Party, agreeing with and ratifying
all the terms and conditions stated herein.

SECTION 7. RELATED DOCUMENTS TO BE SIGNED ON THE CLOSING DATE

7.1. Parties must sign the following documents on the Closing Date in order to complete the
transaction which is object of the present Agreement:

(i) Amendment to the Company’s Articles of Association duly registered by the Board of Trade of the
State of Sao Paulo, through which the Sellers have increased the capital of the Company in the
amount of R$3.000.000,00 (three million Reais), as a result of the capitalization of the loans in
the amount of R$1.500.000,00 (one million and five hundred thousand reais) per shareholder,
amounting to 6.330.000 (six million and three hundred and thirty thousand) quotas.

(ii) Amendment to the Company’s Articles of Association, through which all Quotas held by Sellers
in the Company’s stock capital will be transferred to Purchaser;

(iii) Escrow Agreements regulating the deposit and release of the values identified in item 3.2(ii)
according to the terms of the previous Section 3;

(iv) Employment agreements by key executives; and

(v) Lease Agreement

 

 

 

(vi) Declaration signed by Seller’s wives, in which they are in accordance with the sale of the
Company’s 100% shares.

7.2. As the aforementioned documents are part of the transaction stated herein, Parties must
discuss their terms and conditions in good faith, prior to the Closing Date and, therefore, may not
unjustifiably refuse to sign them, what could be considered a breach of this Agreement.

7.3. Sellers further undertake to sign any and all documents as may be required to consolidated
Purchaser’s title to the Quotas and, consequently, to the Company.

SECTION 8. LIABILITIES AND INDEMNIFICATION

8.1. Sellers assume full responsibility for the accuracy, veracity and preciseness of the
representations and warranties rendered pursuant to Section 4 hereof, which are made in full and do
not omit any relevant fact or circumstance whose lack of knowledge by the Purchaser could induce
the Purchaser into error, or whose knowledge by the Purchaser could change the conditions on which
the Agreement is being executed.

8.2. Sellers shall remain liable for 5 years counted as of the Closing Date, for any liability (a)
which arise from the incorrectness, impreciseness or incompleteness of the representations and
warranties made by the Sellers herein; or (b) which arise from acts, omissions and/or events that
were carried out by the Company or by the Sellers prior to the Closing Date, such as those of a
tax, labor, civil, social security, commercial, corporate, environmental or any other nature,
(together, the “Contingencies”).

8.3. In the event there is an investigation carried out by the fiscal authorities or by the social
security authorities or an administrative or judicial claim of any nature whatsoever during the 5
year period established in item 8.2 above, in relation to facts occurred prior to the Closing Date,
Purchaser or the Company shall promptly notify Sellers of such investigation or claim as to allow
them to defend themselves, the Purchaser or the Company administratively or in court. Sellers will
have the right to defend and discuss the matter until a final court decision (tronsito em
julgodo).

8.4. The costs and expenses incurred as a result of such defense shall be borne by the Sellers and
such defense shall be conducted by the Sellers appointed attorneys.

8.5. It is the Seller’s decision to dispute the claims mentioned in this Section 8, whether in the
administrative or judicial level, However, such decision shall not interfere in the Company’s
ordinary activities such as, but not limited to, requirement of non-debt certificates, Company’s
registration with CADIN, close of financial transactions, tax incentives or authorization to
perform export and import transactions (RADAR).

8.5.1. In the aforementioned cases, Purchaser may use the funds of the Earn-out and Escrow Payment
as to ensure the prompt issuance of the mentioned certificates while the Sellers carry out their
defense. If it occurs after the funds have been released, as described in Section 3, or if the
amount of the funds are not enough, Sellers must make or complete the deposit.

 

 

 

8.6. With respect to the lawsuits already in course, it is hereby agreed by the Parties hereto that
(i) the Sellers’ attorneys may continue to defend them in court or (ii) may transfer those lawsuits
to a law firm to be appointed by the Purchaser, in which case the Company shall also use the funds
of the Earn-out and Escrow Payment. Should the lawsuits in reference be transferred to the
Purchaser’s lawyers, Purchaser shall bear all expenses of the defense, but Sellers shall continue
to be responsible for Purchaser’s indemnification of any losses, unfavorable decisions, among
others, arising therefrom. Sellers shall have the right to appoint others attorneys, at their own
expense, to follow the development of the lawsuits.

8.7 In order to make Sellers defense feasible, Purchaser shall fully cooperate with the Sellers and
cause the Company to cooperate by supplying the power of attorney necessary and granting access to
the Company’s accounting data and records involved, as well as to all materials and data required
in the support of the defense dealt with above.

8.8. Sellers may freely settle, compromise and put an end to disputes over any contingency
mentioned in this Section 8 with regard to any monetary resolution, but any resolution that
involves non-monetary consequences shall have the consent of Purchaser. Should Sellers not succeed
in their discussion of the referred contingency, Sellers shall bear all corresponding costs and
expenses.

8.9. Parties hereby agree that the funds of the Earn-out and Escrow Payment shall be used to pay
settlements, agreements and/or judicial or administrative decisions unfavorable for the Sellers
that may arise during the first three years counted from the present date. After that, or if the
funds are not enough to cover the debts, Sellers must pay it.

8.10. Any amounts paid or deposited in advance by Sellers on behalf of the Company and on account
of or in relation to any contingency or court action regarding the responsibilities defined in this
Section 8 (including any used funds of the Earn-out and Escrow Payment), such as, but not limited
to, amounts posted as bonds in courts, collection credits, fees of counsel and reimbursement for
costs and expenses, which the Company receives or is authorized to withdraw before the achievement
of a favorable decision by Sellers, shall be promptly disbursed to Sellers by the Company.

8.11. The parties agree that with respect to labor claims filed against the Company after the
present date, liability for such claim will be apportioned between Purchaser and Sellers, with
Purchaser being liable for labor liabilities pertaining to activities accruing after the Closing
Date, and Sellers for those pertaining to activities accruing prior thereto.

SECTION 9. CONSEQUENCES OF THE NON PERFORMANCE OF THE AGREEMENT ON THE CLOSING DATE

9.1. If Sellers fail to perform this Agreement by (i) unjustifiably refusing to sign any of the
documents foreseen on Section 7 or (ii) not providing the updated and accurate listings foreseen on
Section 4, Sellers will not have the right to receive any amount regarding the Purchase Price and
Purchaser may terminate this Agreement by just cause, withdrawing the amount deposited according to
item 3.2.1 and Purchaser may also pursue other rights that it may have by law.

 

 

 

9.2. If Purchaser fails to perform this Agreement by (i) unjustifiably refusing to sign any of the
documents foreseen on Section 7, (ii) not accomplishing the obligations of opening the accounts as
mentioned in Section 3, and/or (iii) not paying the amount due on the Closing Date to Sellers,
Sellers may terminate this Agreement by just cause, in which case Sellers shall have the right to
withdraw or transfer to their benefit R$1.380.000,00 (one million and three hundred and eighty
thousand reais) from the down payment amount deposited by Purchaser according to item 3.2.1. The
balance of the down payment amount deposited by Purchaser according to item 3.2.1 shall be returned
to the Purchaser but Sellers may pursue other rights that it may have by law to recover actual
damages greater than R$1.380.000,00 (one million and three hundred and eighty thousand reais)
reais.

SECTION 10. CONFIDENTIALITY

10.1. The parties will, and will cause their representatives, agents and affiliates to maintain
confidentiality of any trade secrets, acquired assets or information related to the Company’s
business, except as such information shall become publicly available, in accordance with the
existing non-disclosure agreement signed between the parties dated January 13, 2010.

SECTION 11. NON COMPETITION

11.1. Sellers agree not to compete with Purchaser or its successors for a period of 5 (five) years,
as of the present date, without the prior written consent of Purchaser. Also, the Sellers shall
not perform the following activities: (a) work, directly or indirectly, within the Brazilian
Territory, or acquire a participation or any other kind of investment in any entity, which develops
any similar business that would compete directly with the Company’s business, as well as the
promotion, sale, distribution of similar goods or services that would compete directly with the
Company’s products, (b) try to induce third parties not to deal with the Company, (c) hire
employee’s of the Company or (d) use or authorize the use of the Company’s trademarks, proprietary
technical information (formulations, customer, market information, etc.).

11.2. This section shall not hinder Sellers from developing any other activity except for those
described herein. For purposes of this provision, “similar business” shall mean the production and
sale of all kind of thermoplastic compounds and masterbatches including additives, color
concentrates, black concentrates, white concentrates and engineered thermoplastic compounds that
are used in the known thermoplastic processes as those products are understood in the relevant
market and that would compete directly with the Company in South America, considering its present
business and activities.

SECTION 12. ASSIGNMENT

12.1. The rights and obligations under this Agreement may not be assigned by the Sellers or
Purchaser without the express prior written consent of the other Party.

 

 

 

SECTION 13. NOTICE

13.1. Any notice pursuant to the terms and conditions of this Agreement shall be in writing and
shall be considered delivered upon receipt by the recipient. The notices shall be duly addressed
to the recipient and delivered to the respective address, as indicated above. Any party may change
its address upon prior written notice to the other party.

If to Sellers:

Mr. HENRI HARA

Address: Rua Barao de Bocaina, 140, apt. 111, Pacaembu

CEP 01241-020 — Sao Paulo/SP

e-mail: henri.hara@uol.com.br

Mr. ELIE HARA

Address: Rua Barao de Bocaina, 112, apt. 141, Pacaembu

CEP 01241-020 — Sao Paulo/SP

e-mail: eliehara@hotmail.com

If to Purchaser:

Mr. Paulo Cesar Palhares, Managing Director

ICO Polymers do Brazil Ltda.

Via Expressa de Contagem, 2785,

Cincao Perobas, Contagem,

MG, CEP 32.370-485,

Copy to:

Attention: General Counsel,

A. Schulman, Inc.

3550 W. Market Street

Fairlawn, Ohio, USA 44333

SECTION 14. PRIOR AGREEMENTS

14.1 The present Agreement revokes and substitutes any other agreement, orally or written, with
respect to the matters herein contemplated, except for the non-disclosure agreement signed between
the parties dated January 13, 2010.

SECTION 15. MISCELLANEOUS

15.1. Upon signing this Agreement, the Parties hereto represent and warrant hereby, spontaneously
and unconditionally, that they are not bound to do it by emergency economic-financial reasons,
agreeing with all terms and conditions provided herein, having no other interest or interest
contrary to the present instrument contents or which could prevent, limit, jeopardize or revoke the
performance of obligations set forth herein.

 

 

 

15.2. The parties expressly represent, for all legal purposes and intents, that the, considerations
under this Agreement are perfectly and economically proportional, pursuant to the effective values
by the time of its execution, being the result of bilateral negotiations and generating benefits to
both Parties, therefore not causing any undue hardship to either of them.

15.3. This Agreement under private signature is hereby accepted by the Parties hereto, as an
extra-judicial security, which can be executed within the law, meeting also provisions of articles
368, 369 and 585, II, all of the Brazilian Code of Civil Procedure. The Parties hereto become
liable under the civil and the criminal law for their representations by the time of this
Agreement’s signing.

15.4. Tolerance by the Parties in not demanding compliance with any term or condition set forth
herein shall not imply waiver, acquittal, novation or alteration of provisions agreed upon hereby.

15.5. The invalidity or unenforceability of any portion or provision of this Agreement shall in no
way affect the validity or enforceability of any other portion or provision hereof.

15.6. Any amendments or complementation to this Agreement shall only be effective when performed in
writing and accepted by the parties hereto.

15.7. The present Agreement is signed irrevocably and irreversibly by and between the Parties,
binding the Parties and their successors.

SECTION 16. GOVERNING LAW AND ARBITRATION

16.1. The parties agree that, any dispute or divergence arising from, and/or relating to this
Agreement, shall exclusively and definitively be resolved through arbitration, to be initiated and
processed in accordance with the Rules of the Brazil-Canada Chamber of Commerce. Parties agree
that the Portuguese version shall prevail.

16.2. The arbitration venue shall be the city of Sao Paulo, state of Sao Paulo, where the
arbitration award shall be issued. The official language for all the acts shall be the Portuguese
language and the applicable laws shall be those of the Federative Republic of Brazil.

16.3. Any decision rendered by the Arbitral Tribunal shall be definitive, non-appeal able and
enforceable by the courts.

16.4. The Parties elect, with exclusion of all others, the courts of the judicial district of Sao
Paulo exclusively for the purpose, when and if necessary of (i) obtaining coercive measures or
precautionary measures, as guarantee of the arbitration proceedings in course or to be initiated
between the Parties and/or to assure the existence and effectiveness of the arbitration
proceedings; and (ii) obtaining injunctions or specific performance, it being agreed that upon the
granting of such injunction or specific performance, full and exclusive jurisdiction shall reverted
to the Arbitration Tribunal already formed or to be initiated, as the case may be, which decision
on any and all dispute, whether on the procedure or on the merits, shall be final and binding.

 

 

 

In witness whereof, the parties have caused this Agreement to be executed by its legal
representatives in four (04) counterparts with the same content and format for the due legal
purposes and intents and in the presence of the two undersigned witnesses.

	 	 	 	 	 
	 	Sao Paulo, October 15th, 2010

 	 
	 	/s/ Paulo Cesar Palhares
 	 
	 	ICO POLYMERS DO BRASIL LTDA. 	 
	 	p. Paulo Cesar Palhares 	 
	 	 	 
	 	                                        /s/ Henri Hara
 	 
	 	HENRI HARA 	 
	 	 	 
	 	                                        /s/ Elie Hara
 	 
	 	ELIE HARA 	 
	 	 	 
	 	                                   /s/ Paulo Cesar Palhares
 	 
	 	A. SCHULMAN, INC. 	 

Witnesses:

	 	 	 	 	 
	1)

	 	/s/ Sergio L. Duluni	 	 
	 

	 	 

	 	 
	2)

	 	/s/ Yuri Cavalho Machado	 	 
	 

	 	 

	 	 

 

 

 

QUOTA PURCHASE AND SALE AGREEMENT SIGNED

BETWEEN ICO POLYMERS DO BRASIL LTDA. AND HENRI

KARA AND ELIE HARA ON OCTOBER 15, 2010

EXHIBIT 3.2.2.2

1. For the purposes of the performance mentioned on Item 3.2.2 and following items of the
Agreement, Parties will consider the definitions as stated below:

(i) Full Capacity Utilization Volume of the Recently-Added Third Extrusion Line (in addition
to full capacity utilization of the two initial extrusion lines): 250.000kg of produced products
per month.

(ii) Volume equivalent to 80% Capacity Utilization of the Recently-Added Third Extrusion Line
(in addition to capacity utilization of the two initial extrusion lines): 200.000kg of produced
products per month.

(iii) Performance Goal: monthly average production equivalent to a volume of 200.000kg of
products in the Recently-Added Third Extrusion Line.

(iv) The volume mentioned on item (iii) above is going to be supported by the products that
are being produced in the Recently-Added Third Extrusion Line and by the products of the new
projects listed in the attachment hereto, in case the acquisition of a fourth extrusion line
becomes necessary in order to attend their production and any client of the third line ends the
commercial relationship with the Company. In this case, the production volume of the fourth line
regarding the new projects listed in the attachment hereto, will be considered for the calculation
of the performance established in the Agreement.

(v) Period for Assessment of the Performance Goal: The period to be considered for the
assessment of the Performance Goal will correspond to the twelve (12) months prior to the date in
which the 3rd anniversary of the Agreement will be completed, which is on November 3,
2013.

(vi) Method of Calculation for Assessment of the Performance Goal: The assessment will be
calculated by adding up the monthly volume production of the Third Extrusion Line (and of the
fourth, eventually, in the hypothesis mentioned in item (iii) above) of the twelve (12) months
prior to November 3, 2013, and dividing this result by 12.

 

 

 

2. This Exhibit is an essential part of the Agreement, which content is hereby accepted by the
Parties in common consent.

	 	 	 	 	 
	 	Sao Paulo, November 3rd, 2010. 	 
	 	 	 
	 	                                   /s/ Paulo Cesar Palhares
 	 
	 	ICO POLYMERS DO BRASIL LTDA. 	 
	 	p. Paulo Cesar Palhares 	 
	 	 	 
	 	                                        /s/ Henri Hara
 	 
	 	HENRI HARA 	 
	 	 	 
	 	                                        /s/ Elie Hara
 	 
	 	ELIE HARA 	 
	 	 	 
	 	                                   /s/ Paulo Cesar Palhares
 	 
	 	A. SCHULMAN, INC. 	 

Witnesses:

	 	 	 	 	 
	1)

	 	/s/ Sergio L. Duluni	 	 
	 

	 	 

	 	 
	2)

	 	/s/ Yuri Cavalho Machado

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00182-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00182-of-00352.parquet"}]]