SHAREAND ASSET PURCHASE AGREEMENTEx.2.1 byand among ArtekAterian Holding Company, LLC AterianInvestment Partners Distressed Opportunities, LP ArtekSurfin Chemicals Ltd. and ChemturaCorporation February23, 2010

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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 context indicates otherwise.  The table of contents and the headings of Articles and Sections are provided for convenience only and are not intended to affect the construction or interpretation of this Agreement.  All words used in this Agreement are to be construed to be of such gender or number as the circumstances require.  The words “including,” “includes,” or “include” are to be read as listing non-exclusive examples of the matters referred to, whether or not words such as “without limitation” or “but not 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 party is legally obligated to do so in accordance with this Agreement.  Any reference to a statute is deemed also to refer to any amendments or successor legislation as in effect at the relevant time.  Any reference to a Contract or other document as of a given date means the Contract or other document as amended, supplemented and modified from time to time through such date.

 

 

Section 2.1           Sale and Purchase 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 and transfer to the Designated Affiliate and the Purchaser will cause its Designated 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 Agreement and except as set forth in Section 2.2, at the Closing, the Seller will, and the Seller will cause the Seller Affiliates (solely with respect to any inventory or receivables of the Business located in Europe or Latin America as set forth in Section 2.10) to, sell, convey, assign, transfer and deliver to the Purchaser, free and clear of all Encumbrances, and the Purchaser will purchase and acquire from the Seller and such Seller Affiliate, if applicable, all of the right, title and interest of the Seller and such Seller Affiliate, if applicable, in and to all of the following assets (collectively, the “Purchased Assets”):

 

(i)           all finished goods inventory, goods-in-transit, raw materials and work-in-process and packaging materials used or held for use solely and exclusively in the Business including those on consignment where Seller is the consignor or held in the possession of any third party (the “Inventory”);

 

(ii)          all trade accounts receivable and other rights to payment from third-party customers of the Business to the extent allocable to the Business and not to the Seller or its Affiliates’ unrelated operations, and the full benefit of all security for such accounts receivable or rights to payment, including all trade accounts receivable representing amounts receivable in respect of goods shipped or products sold or services rendered to customers of the Business and all other accounts or notes receivable to the extent allocable to the Business and the full benefit of all security for such accounts or notes (the “Accounts Receivable”);

 

(iii)         all of the rights of the Seller under all Contracts exclusively relating to the Business , including those 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, repair and overhaul (MRO) inventories, tools, and other items of tangible personal property located at the Taft, Louisiana Owned Real Property (other than such as are exclusively used for production of Isopetronate HL-44, which the Seller may elect to retain), or used or held for use by the Seller exclusively in the Business, and the related interests of the Seller therein;

 

 

(v)           (A) the real property set forth on Schedule 2.1(b)(v)(A), (collectively, the “Owned Real Property”), together with all improvements located thereon, and all fixtures, warranties, guaranties and all other appurtenances related thereto;

 

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

 

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

 

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

 

(ix)          to the extent transferable under applicable Law, all books, records, studies, reports, files and papers, exclusively used in the Business or exclusively relating to the Purchased Assets (and copies of all books, records, files and papers used both in the Business and in other Seller operations) to the extent used in the Business, including all advertising materials, client and customer lists, supplier and vendor lists, purchase orders, sales and purchase invoices, production reports, health and safety studies, toxicology studies, personnel and employment records, and financial and accounting records other than the corporate 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 third parties relating to or arising from any of the Purchased Assets or Assumed Liabilities, including unliquidated rights under manufacturers’ and vendors’ warranties;

 

(xi)          all of the Seller’s Prepaid Inventory; and

 

(xii)         any and all Bankruptcy Avoidance Actions of Seller and all other Persons who are debtors in the Case against the Acquired Company (“Assigned Bankruptcy Avoidance Actions”).

 

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

 

Section 2.2           Excluded Assets.  Notwithstanding the terms of Section 2.1 the 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 not include, any assets other than the Purchased Assets, including any assets to 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 at the real property set forth on Schedule 2.2(b);

 

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

 

(d)           the shares of the capital stock of the Seller and all 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 and rights thereunder and proceeds thereof;

 

 

(f)           all rights under all Contracts of the Seller other than the Included Contracts, including the shared Contracts set forth on Schedule 2.2(f);

 

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

 

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

 

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

 

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

 

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

 

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

 

(m)         except for the Assigned Bankruptcy Avoidance Actions, any and all avoidance or other causes of action arising under Sections 510, 544 through 550 and 553 of the Bankruptcy Code or under 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 Business sold or otherwise transferred or disposed of during the period from the date of this Agreement through and including the Closing Date (including any tangible assets used exclusively in the production of Isopetronate HL-44 which the Seller may relocate), in any event in accordance with the provisions of this Agreement; and

 

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

 

For purposes of clarity, the Excluded Assets do not include the Shares or any assets of the Acquired Company.

 

Section 2.3           Assumed Liabilities.  In accordance with the provisions of this Agreement, at the Closing, subject to Article 11, the Purchaser will assume and pay or perform and discharge when due any and all of the Liabilities of the Seller to the extent relating to the Business or the Purchased 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, the Assumed Liabilities include the following:

 

 

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

 

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

 

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

 

(d)           all pension obligations in the manner and to the extent described in Article 10, and all accrued vacation and sick time relating to the employment of Transferred Employees on or prior to the Closing Date and all Liabilities relating to the employment of the Transferred Employees arising after the Closing Date;

 

(e)           all Liabilities arising out of or relating to the termination by the Seller in connection with the transactions contemplated by this Agreement of, or failure by the Purchaser to hire, any Employees, including any Liabilities to provide benefits or severance with respect to any Employee or any of their dependents, beneficiaries and joint annuitants and any Liabilities arising under the WARN Act and any other Laws requiring notification to or consultation with Employees or their representatives as a result of the transactions contemplated by this Agreement;

 

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

 

(g)           all Liabilities associated with the Owned Real Property first arising on or following the Closing Date (except as provided in Article 11);

 

(h)           all Liabilities relating to or arising out of Environmental 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-Site Liabilities (as defined below), the Compliance Liabilities (as defined below) and Taft Air Issue Fines and Penalties (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 Raw Material Inventory; and

 

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

 

For purposes of clarity, the Assumed Liabilities do not include any Liabilities of the Acquired Company, all of which will remain Liabilities of the Acquired Company before, on and after Closing.

 

 

Section 2.4          Excluded Liabilities.  Notwithstanding any other provision of this Agreement or any other writing to the contrary, the Purchaser and its Designated Affiliates are assuming only the Assumed Liabilities and are not assuming any other Liability of the Seller or any Selling Affiliate of whatever nature, whether presently in existence or arising hereafter, including the following (the “Excluded Liabilities”):

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(j)           any Proceedings set forth in Schedule 2.4(j) or filed after the date hereof relating exclusively to pre-Closing activity of the Business (other than a Proceeding to the extent relating to Assumed Liabilities);

 

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

 

 

(l)           all Liabilities arising out of or relating to fines and penalties assessed for any violation occurring prior to Closing of any Environmental Law or Environmental Authorization by Seller or related to the Business or the Purchased Assets, other than any such Liabilities arising out of or relating to the Taft Air Issue (the “Compliance Liabilities”);

 

(m)          all Liabilities arising out of or relating to fines and penalties arising out of or related to the Taft Air Issue occurring prior to Closing (regardless of whether such fines or penalties were assessed prior to, on or after the Closing) (the “Taft Air Issue Fines and Penalties”); and

 

(n)           all Liabilities relating to the employment of employees and former employees of the Business who are not Transferred Employees.

 

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

 

Section 2.5           Consideration.

 

(a)           The consideration for the Purchased Assets and the Shares (the “Purchase Price”) consists of (a) sixteen million two hundred thirty dollars (U.S. $16,230,000) in cash (the “Initial Cash Consideration”), subject to adjustment in accordance with Section 2.6 (the Initial Cash Consideration, as adjusted, the “Final Cash Consideration”), (b) the Trade Accounts Payable Adjustment Payment, (c) the European Trade Accounts Payable Adjustment Payment, (d) the Shared Accounts Payable Adjustment Payment, (e) the Accrued Payroll and Benefits Adjustment Payment and (f) the assumption of the Assumed Liabilities, including the on-site environmental and pension Liabilities assumed pursuant to Section 2.3.

 

(b)           The Initial Cash Consideration, the Trade Accounts Payable Adjustment Payment, the European Trade Accounts Payable Adjustment Payment, the Shared Accounts Payable Adjustment Payment and the Accrued Payroll and Benefits Adjustment Payment shall be paid as follows:

 

(i)           the Purchaser will be credited under clause (ii) of this Section for its deposit, in the amount of five hundred thousand dollars (U.S. $500,000) (such amount, together with the interest and income thereon, the “Deposit Amount”), which was paid in accordance with the Bidding Procedures Order to Citibank, N.A., as deposit agent (the “Deposit Agent”);

 

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

 

(iii)         on the Business Day following the 15th day following the Closing Date, the Purchaser shall pay, by wire transfer of immediately available funds in U.S. dollars, an amount equal to fifty percent (50%) of the European Trade Accounts Payable Adjustment Payment; and

 

 

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

 

Section 2.6           Post-Closing Closing Net Working Capital Adjustment.

 

(a)           Within ninety (90) days after the Closing Date, the Seller will prepare and deliver to the Purchaser a written notice (the “Adjustment Notice”) containing (i) the Seller’s calculation of the Closing Net Working Capital (the “Final Closing Net Working Capital”) and (ii) the Seller’s calculation of the amount of any payments required pursuant to Section 2.6(h) (the “Adjustment Calculation”).  The Final Closing Net Working Capital and the Adjustment Calculation, if any, shall be set forth in U.S. dollars after any applicable portion thereof has been converted from euros at the euro foreign exchange reference rate published in the Wall Street Journal on the Closing Date.  The Adjustment Notice will be prepared in accordance with the accounting methods and practices set forth in Schedule 2.6(a) (the “Calculation Principles”).

 

(b)           The parties agree that, for purposes of calculating the Final Closing Net Working Capital, the value of the Inventory shall be capped at an amount (the “Inventory Cap”) equal to fifty million dollars ($50,000,000); provided, however, that the Seller and the Purchaser shall negotiate in good faith prior to Closing to seek to agree a methodology for adjusting the Inventory Cap upwards or downwards, and to set forth such agreement on a Schedule 2.6(b), based on fluctuations in the prices of (i) the metal tin, as quoted on the London Metal Exchange, (ii) soy bean oil, as quoted on the Chicago Board of Trade, and (iii) Butadiene, as quoted from Chemical Market Associates, Inc.  If prior to Closing Seller determines in good faith that it is in the interest of the Business to pre-buy raw materials for the manufacture of Inventory, Seller shall so notify Purchaser and Seller and Purchaser 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 Date Inventory.  Any dispute relating to the new Inventory Cap shall be resolved in accordance with Section 2.6(f).

 

(c)           During the preparation of the Adjustment Notice, the Purchaser will, and will cause each of its Affiliates to, (i) provide the Seller and the Seller’s representatives with full access during normal business hours to the books, records, facilities and employees of the Business, (ii) provide the Seller, within thirty (30) days after the Closing Date, with normal month-end closing financial information for the period ending as of the close of business on the Closing Date and (iii) reasonably cooperate with the Seller and the Seller’s representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice.

 

(d)           Within forty-five (45) days after delivery of the Adjustment Notice, the Purchaser will either:

 

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

 

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

 

During the review of the Adjustment Notice, the Seller will, and will cause each of its Affiliates to, (i) provide the Purchaser and the Purchaser’s representatives with full access to the supporting documentation used to prepare the Adjustment Notice, and (ii) reasonably cooperate with the Purchaser and the Purchaser’s representatives, including by providing on a timely basis all information reasonably necessary or useful in reviewing the Adjustment Notice.  For purposes of this Section 2.6(d), the Purchaser may not deliver a Dispute Notice unless the aggregate value of all such disputed items exceeds five hundred thousand dollars ($500,000).

 

 

(e)           If the 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 of its Affiliates have provided the Purchaser with all reasonably requested supporting documentation to review the Adjustment Notice within such forty-five (45) day period, then the Purchaser will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.6(h).

 

(f)           If the Purchaser timely delivers a Dispute Notice to the Seller, then the Purchaser 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 the Seller during such 30-day period as to any disputed items will be final and binding on the parties for purposes of Section 2.6(h).  If the Purchaser and the Seller do not resolve all disputed items by the end of thirty (30) days after the date of delivery of the Dispute Notice, then the Purchaser and the Seller will submit the remaining items in dispute to Ernst & Young, LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized national standing, which firm is not the regular auditing firm of the Purchaser or the Seller.  If the Purchaser and the Seller are unable to jointly select such independent accounting firm within ten (10) days after such 30-day period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized national standing and such selected accounting firms will select a third independent accounting firm of recognized national standing, which firm is not the regular auditing firm of the Purchaser or the Seller; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fail to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.6 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”).  The Purchaser and the Seller will instruct the Independent Accounting Firm to render its determination with respect to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation.  The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within thirty (30) days after referral of the items to such firm or as soon thereafter as reasonably practicable.  The Independent Accounting Firm’s determination of the Adjustment Calculation as set forth in its report will be final and binding on the parties for purposes of Section 2.6(h).  The Seller will revise the calculation of the Final Closing Net Working Capital as appropriate to reflect the resolution of the items in dispute pursuant to this Section 2.6(f).  The fees and expenses of the Independent Accounting Firm will be shared by the Purchaser and the Seller in inverse proportion to the relative amounts of the disputed amount determined to be for the account of the Purchaser and the Seller, respectively.

 

 

(g)           For purposes of complying with this Section 2.6, the Purchaser and the Seller (i) may mutually agree in writing to extend any time restriction set forth herein in ten (10) day increments, (ii) will furnish to each other and to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items as the Independent Accounting Firm may request and are available to that party (or its independent public accountants) and (iii) will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items and to discuss the items with the Independent Accounting Firm.

 

(h)           If the Final Closing Net Working Capital as finally determined pursuant to this Section 2.6 is less than Base Working Capital, then the Seller will pay to the Purchaser the amount of such difference in cash plus interest thereon (calculated based 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 rate of six percent (6%) per annum.  If the Final Closing Net Working Capital as finally determined pursuant to this Section 2.6 is greater than the Base Working Capital, then the Purchaser will pay to the Seller the amount of such difference in cash plus interest thereon (calculated based 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 rate of six percent (6%) per annum.  For purposes 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 forth in Schedule 2.6(h).

 

(i)           Any payment to the Purchaser pursuant to Section 2.6(h) will be effected by wire transfer of immediately available funds from the Seller to an account designated by the Purchaser, and any payment to the Seller pursuant to Section 2.6(h) will be effected by wire transfer of immediately available funds to an account designated by the Seller.  Such payments will be made within five (5) Business Days following the final determination of the Final Closing Net Working Capital in accordance with this Section 2.6.

 

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

 

Section 2.7           Allocation of Purchase Price.

 

At least twenty (20) Business Days prior to the Closing, the Seller and the Purchaser shall have agreed to allocate the Initial Cash Consideration, the Trade Accounts Payable Adjustment Payment, the European Trade Accounts Payable Adjustment Payment, the Shared Accounts Payable Adjustment Payment and the Accrued Payroll and Benefits Adjustments Payment among the Shares on the one hand and the Purchased Assets on 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 be adjusted after the date thereof, except to take into account any adjustment to the Initial Cash Consideration in accordance with this Agreement. Within 120 days after the Closing Date and consistently with Schedule 2.7(a), the Seller and the Purchaser shall in good faith agree how to allocate the Purchase Price (taking into account Assumed Liabilities to the extent they are included in the amount realized for income tax purposes) among the Shares and the Purchased Assets consistent with the principles set forth on Schedule 2.7(a), (which shall include an allocation of the portions of the Purchase Price, allocated to the Shares and the Liabilities of the Acquired Company among the assets of the Acquired Company for U.S. federal income tax purposes) (the “Closing Allocation Schedule”). The Purchaser shall initially propose the content of the Closing Allocation Schedule and if the Purchaser does so, such proposal shall be subject to the Seller’s review and reasonable objection, to be resolved by good-faith negotiations 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 of state, local or foreign Law), Purchaser and Seller agree to act, and to cause their Affiliates to act, in accordance with the allocations contained in the Closing Allocation Schedule, for all Tax purposes and that neither of them will (or will permit its Affiliates to) take any position inconsistent therewith in any Tax Returns or similar filings (including IRS Form 8594 or any similar form required to be filed under state, local or foreign Law), any refund claim, litigation, audit or otherwise; provided, however, that (i) Purchaser’s cost for the assets that it is deemed to have acquired may differ from the total amount allocated hereunder to reflect the inclusion in the total cost of items (for example, capitalized acquisition costs) not included in the total amount so calculated and (ii) the amount realized by Seller may differ from the total amount allocated hereunder to reflect transaction costs that reduce the amount realized for federal income tax purposes.  The Purchaser and the Seller each agree to provide the other party with any additional 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 party a copy of any appraisal obtained by such party in connection with the allocation under this Section 2.7. Where a confidentiality obligation would otherwise prohibit a party from so providing a copy of any such appraisal, such party shall use its commercially reasonable efforts to obtain a waiver of such confidentiality obligations.

 

 

Section 2.8           Closing.   The closing of the transactions contemplated by this Agreement (the “Closing”) will take place at the offices of Baker & McKenzie LLP, 1114 Avenue of the Americas, New York, New York 10036, at 10:00 a.m., local time, on the last Business Day of the calendar month in which the later of the following occurs: (i) thirty (30) Business Days following the approval of the Approval Order or (ii) the date in which the last of the conditions set forth in Article 6 has been satisfied or waived (other than those conditions that by their nature can only be satisfied at the Closing), or at such other time and place as the Seller and the Purchaser may agree in writing.  The date on which the Closing actually occurs is referred to in this Agreement as the “Closing Date.”  For all purposes under this Agreement and each of the Ancillary Agreements, all matters at Closing will be considered to take place simultaneously, no delivery of any document will be deemed complete until all transactions and deliveries of documents are completed, and the Closing will be deemed to have occurred at 12:01 a.m., Eastern Standard Time, on the Closing Date irrespective of the actual occurrence of the Closing at any particular time on the Closing Date.

 

Section 2.9           Closing Deliveries.

 

(a)           At the 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 “Bill of 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 the Seller;

 

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

 

(iv)        such deeds, documents, instruments and actions as are necessary or appropriate to effect the valid sale and transfer of  the Shares to the Purchaser or its Designated Affiliate, duly executed by the Share Selling Affiliate, and/or the managing director or the Acquired Company, as required pursuant to German Law;

 

(v)         assignments of all Purchased Intellectual Property in the forms of Exhibit E-1 and E-2 (collectively, the “IP Assignments”), together with all intervening assignments into the name of Chemtura Corporation to the extent necessary or desirable to enable recording of assignments to Purchaser and License of Shared Intellectual Property in the form of Exhibit E-3 (the “IP License Agreement”), duly executed by the Seller;

 

 

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

 

(vii)       a certificate, dated as of the Closing Date, executed by the Seller confirming the satisfaction of the conditions specified in Section 6.1(a) and 6.1(b);

 

(viii)      the resignations of the managing directors of the Acquired Company set forth on Schedule 2.9(a)(viii), to the extent that such resignations have been requested in writing by the Purchaser 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 environmental indemnity 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;

 

(xv)        to the extent available to the Seller, the original certificates of title for all vehicles and other assets evidenced by certificates of title or similar instruments, duly endorsed in the manner sufficient to convey title to Purchaser;

 

(xvi)       evidence that notice of termination of the Acquired Company’s participation in the domination and profit and loss pooling agreements has been made in accordance with German Law;

 

(xvii)      a non-resident withholding certificate complying with the U.S. Foreign Investment Real Estate Property Tax Act in form and substance reasonably acceptable to the Purchaser;

 

(xviii)     assignments of Seller’s rights in and to any confidentiality agreements, to the extent such confidentiality agreements are assignable in accordance with their respective terms, entered into with Persons were prospective bidders, or that participated in the process of selling the Purchased Assets and Acquired Company, including, without limitation, bidders in the auction for the Purchased Assets and Acquired Company other than Purchaser; and

 

(xix)        the purchase agreement for thioesters, Weston 618F and Weston 619, in the form agreed upon by the Seller and Artek at the time of execution of this Agreement, duly executed by the Seller.

 

 

(b)           At the Closing, Artek (solely for the purpose of sub-clause (xii) below) and the Purchaser will, for itself and as agent for its Designated Affiliate, deliver or cause to be delivered to the Seller, for itself and as agent for the Share Selling Affiliate:

 

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

 

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

 

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

 

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

 

(v)          the IP Assignments, if any, that call for a signature by the Purchaser and/or its Designated Affiliates, duly executed by the Purchaser and/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 executed by the Purchaser confirming the satisfaction of the conditions specified in Sections 6.2(a) and 6.2(b);

 

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

 

(viii)       the TBT Supply Agreement, duly executed by the Purchaser;

 

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

 

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

 

(xi)          the Ciba Environmental Indemnity Assignment, duly executed by the Acquired Company; and

 

(xii)         the purchase agreement for thioesters, Weston 618F and Weston 619, in the form agreed upon by the Seller and Artek at the time of the execution of this Agreement, duly executed by Artek.

 

Section 2.10           Certain Foreign Purchased Assets.

 

(a)           The Seller 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)           The Seller shall cause the book value of the Other Purchased Assets in the books and records of the Acquired Company immediately after the transfer pursuant to Section 2.10(a) above to be equal to the book value of the Other Purchased Assets as set forth in the books and records of the relevant Seller Affiliates immediately prior to such transfer.

 

 

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

 

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

 

The Seller represents and warrants to the Purchaser as follows, except as set forth on the disclosure schedule delivered by the Seller to the Purchaser concurrently with the execution and delivery of this Agreement and dated as of the date of this Agreement (the “Seller Disclosure Schedule”):

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

 

Section 3.2           Authority and Enforceability.

 

(a)           Upon entry of the Approval Order and subject to it becoming a Final Order, the Seller will have all requisite corporate power and authority to execute and deliver this Agreement and to perform its obligations under this Agreement.  The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated by this Agreement by the Seller have been duly authorized by all necessary corporate action on the part of the Seller.  Upon entry of the Approval Order and subject to it becoming a Final Order, and assuming the due authorization, execution and delivery of this Agreement by the Purchaser, this Agreement will constitute the valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms, subject to (i) Laws of general application relating to bankruptcy, insolvency and the relief of debtors and (ii) Laws governing specific performance, injunctive relief and other equitable remedies.