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Title: |
Purchase and Exchange Agreement |
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Entities: |
Citicorp USA, Inc.; Crompton Corp.; Deutsche Bank Securities Inc.; General Electric Co.; J.P. Morgan Securities Inc.; Bank of America, NA; Wachtell, Lipton, Rosen & Katz; Weil, Gotshal & Manges LLP |
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Date: |
2003 |
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Size: |
Preview shows 30KB of 561KB total |
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Price: |
$99 |
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ID: |
#229318 |
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Start of Preview |
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PURCHASE AND EXCHANGE AGREEMENT
BY AND BETWEEN
CROMPTON CORPORATION
AND
GENERAL ELECTRIC COMPANY
DATED AS OF APRIL 24, 2003
{PAGE}
TABLE OF CONTENTS
PAGE
1. Definitions......................................................2
1.1 Defined Terms..............................................2
1.2 Additional Defined Terms..................................26
1.3 Other Definitional and Interpretive Matters...............30
2. Purchase and Sale of the OSi Business...........................31
2.1 Purchase and Sale of OSi Assets...........................31
2.2 Excluded OSi Assets.......................................32
2.3 Purchase Price; Consideration; Earn-Out Payments..........33
2.4 Assumed OSi Liabilities...................................38
2.5 Excluded Crompton Liabilities.............................39
2.6 Purchase and Sale of SC Assets............................40
2.7 Excluded SC Assets........................................41
2.8 Assumed SC Liabilities....................................43
2.9 Excluded GE Liabilities...................................43
2.10 Net Assets................................................45
2.11 Transferred OSi Subsidiary................................48
2.12 Like-Kind Exchange........................................50
2.13 Further Assurances; Further Conveyances and Assumptions;
Consent of Third Parties..................................50
2.14 No Licenses...............................................54
2.15 Bulk Sales Law............................................54
2.16 Transfer Taxes and VAT....................................55
2.17 Alternative Structures....................................56
3. Representations and Warranties of Crompton......................56
3.1 Organization and Qualification............................57
3.2 Subsidiaries..............................................57
3.3 Authorization; Binding Effect.............................58
3.4 Non-Contravention; Consents...............................59
3.5 Title to Property; Principal Equipment; Sufficiency
of Assets ............................................... 59
3.6 Permits...................................................60
3.7 Real Estate...............................................60
3.8 Compliance With Laws; Litigation..........................62
3.9 OSi Business Employees....................................63
3.10 OSi Contracts.............................................64
3.11 OSi Environmental, Safety and Health Matters..............64
3.12 OSi Financial Statements; Absence of Changes..............65
3.13 OSi Intellectual Property.................................67
3.14 Crompton Brokers..........................................70
3.15 Certain Tax Matters.......................................70
i
{PAGE}
3.16 Transactions with Affiliates..............................72
3.17 Crompton Intercompany Arrangements........................73
3.18 Relationships with Customers..............................73
3.19 Inventory.................................................73
3.20 Independent Assessment....................................73
3.21 Accounts Receivable and Accounts Payable..................73
3.22 No Other Crompton Representations or Warranties...........74
4. Representations and Warranties of GE............................74
4.1 Organization and Qualification............................74
4.2 Subsidiaries..............................................75
4.3 Authorization; Binding Effect.............................75
4.4 Non-Contravention; Consents...............................76
4.5 Title to Property; Principal Equipment; Sufficiency
of Assets................................................ 76
4.6 Permits...................................................77
4.7 Real Estate...............................................77
4.8 Compliance With Laws; Litigation..........................78
4.9 SC Business Employees.....................................78
4.10 SC Contracts..............................................80
4.11 SC Environmental, Safety and Health Matters...............80
4.12 SC Financial Statements; Absence of Changes...............81
4.13 SC Intellectual Property..................................82
4.14 GE Brokers................................................85
4.15 Certain Tax Matters.......................................85
4.16 Independent Assessment....................................86
4.17 GE Intercompany Arrangements..............................86
4.18 Transactions with Affiliates..............................86
4.19 Inventory.................................................86
4.20 Accounts Receivable and Accounts Payable..................87
4.21 Blendex Agreements; GE Plastics Agreement; GE Betz
Agreement ............................................... 87
4.22 Relationships with Customers..............................88
4.23 Baseline CM...............................................88
4.24 No Other GE Representations or Warranties.................88
5. Certain Covenants...............................................88
5.1 Access and Information....................................88
5.2 Conduct of Business.......................................91
5.3 Environmental Matters.....................................96
5.4 Tax Covenants.............................................96
5.5 Employment of Employees of the OSi and SC Businesses.....100
5.6 Retirement Plans.........................................106
ii
{PAGE}
5.7 Welfare Benefits.........................................108
5.8 Labor Matters............................................112
5.9 Collateral Agreements; Leased Equipment..................113
5.10 Commercially Reasonable Efforts..........................114
5.11 Contacts with Suppliers, Employees and Customers.........116
5.12 Use of Trade or Service Marks............................116
5.13 Non-Solicitation of Employees............................118
5.14 Non-Competition..........................................118
5.15 Certain Business Arrangements............................124
5.16 Notification by the Parties..............................126
5.17 Intercompany Agreements..................................126
5.18 Backing Letters; Letters of Credit; Guarantees...........126
5.19 SC Customer Remittances..................................127
5.20 Delivery of Audited Financial Statements.................127
5.21 Insurance................................................128
5.22 Blendex Agreements.......................................129
5.23 Inventory Count..........................................131
5.24 Certain Intellectual Property Matters....................131
5.25 Provision of Certain Information.........................133
5.26 Accounts Payable and Accounts Receivable.................133
5A. Remediation of OSi Environmental Conditions....................135
5A.1 Crompton's Obligations Regarding Remediation of OSi
Environmental Conditions.................................135
5A.2 Limitations on Crompton's Obligations....................135
5A.3 Solicitation of Remedial Action..........................136
5A.4 Notice...................................................137
5A.5 Remediation Standard.....................................137
5A.6 Fines and Penalties......................................138
5A.7 [Reserved]...............................................138
5A.8 Allocation of Certain Closure Costs......................138
5A.9 Crompton's Option to Obtain No Further Action
Determination ...........................................138
5A.10 [Reserved]...............................................139
5A.11 Responsibility to Direct Work............................139
5A.12 Implementation of Work...................................140
5A.13 Crompton's Access to the OSi Premises....................140
5A.14 Insurance................................................141
5A.15 Non-Applicability........................................142
iii
{PAGE}
5B. Remediation of SC Environmental Conditions.....................142
5B.1 GE's Obligations Regarding Remediation of SC
Environmental Conditions.................................142
5B.2 Limitations on GE's Obligations..........................142
5B.3 Solicitation of Remedial Action..........................143
5B.4 Notice...................................................144
5B.5 Remediation Standard.....................................144
5B.6 Fines and Penalties......................................145
5B.7 [Reserved]...............................................145
5B.8 [Reserved]...............................................145
5B.9 GE's Option to Obtain No Further Action Determination....145
5B.10 [Reserved]...............................................145
5B.11 Responsibility to Direct Work............................145
5B.12 Implementation of Work...................................147
5B.13 GE's Access to the SC Premises...........................147
5B.14 Insurance................................................147
5B.15 Non-Applicability........................................148
6. Confidential Nature of Information.............................148
6.1 Confidentiality Agreements...............................148
6.2 Crompton's and GE's Trade Secrets........................149
7. Closing........................................................150
7.1 Deliveries by Crompton or the OSi Subsidiaries...........150
7.2 Deliveries by GE.........................................151
7.3 Closing Date.............................................152
7.4 Contemporaneous Effectiveness............................152
8. Conditions Precedent to Closing................................152
8.1 General Conditions.......................................152
8.2 Conditions Precedent to GE's Obligations.................153
8.3 Conditions Precedent to Crompton's Obligations...........154
9. Status of Agreements...........................................155
9.1 Survival.................................................155
9.2 Tax Indemnification......................................155
9.3 General Agreement to Indemnify...........................157
9.4 General Procedures for Indemnification...................162
9.5 Dispute Resolution.......................................164
iv
{PAGE}
10. [Reserved].....................................................164
11. Miscellaneous Provisions.......................................164
11.1 Notices..................................................164
11.2 Expenses.................................................165
11.3 Entire Agreement; Modification...........................165
11.4 Assignment; Binding Effect; Severability.................165
11.5 Governing Law............................................166
11.6 Consent to Jurisdiction..................................166
11.7 Waiver of Jury Trial.....................................166
11.8 Execution in Counterparts................................167
11.9 Public Announcement......................................167
11.10 No Third-Party Beneficiaries.............................167
11.11 Designated Affiliates....................................168
12. Termination and Waiver.........................................168
12.1 Termination..............................................168
12.2 Effect of Termination....................................169
12.3 Collateral Agreements; Material to be Returned...........170
12.4 Waiver of Agreement......................................170
12.5 Amendment of Agreement...................................170
v
{PAGE}
SCHEDULES
SCHEDULE 2.1(A) Assumed OSi Leases
SCHEDULE 2.1(H) OSi Contracts
SCHEDULE 2.1(I) OSi Licenses
SCHEDULE 2.1(J) OSi Governmental Permits
SCHEDULE 2.1(K) Transferred OSi JV Interest
SCHEDULE 2.1(O) Additional Transferred OSi Assets
SCHEDULE 2.2(F) Excluded OSi Contracts
SCHEDULE 2.2(I) Excluded OSi Intellectual Property
SCHEDULE 2.2(L) Additional Excluded OSi Assets
SCHEDULE 2.3(A) Consideration for the Transferred OSi Subsidiary
Shares
SCHEDULE 2.3(C)(1) Earn-Out Accounting Principles
SCHEDULE 2.3(C)(2) Mapping of Accounts
SCHEDULE 2.3(F) Advisory Committee
SCHEDULE 2.6(G) SC Contracts
SCHEDULE 2.6(H) SC Licenses
SCHEDULE 2.6(J) SC Governmental Permits
SCHEDULE 2.6(N) Additional Transferred SC Assets
SCHEDULE 2.7(F) Excluded SC Contracts
SCHEDULE 2.7(K) SC Business Joint Ventures
SCHEDULE 2.7(M) Additional Excluded SC Assets
SCHEDULE 2.10(A)(I) Adjustments to Base OSi Statement
SCHEDULE 2.10(A)(II) Adjustments to Base SC Statement
SCHEDULE 2.12 Like-Kind Exchange Assets
SCHEDULE 3.2(A) OSi Subsidiaries
SCHEDULE 3.2(B) Transferred OSi Subsidiary
SCHEDULE 3.4 OSi Consents
SCHEDULE 3.5(A) Valid Interests
SCHEDULE 3.6 OSi Governmental Permits
SCHEDULE 3.7(A) Transferred Owned OSi Property
SCHEDULE 3.7(B)(I) Assumed OSi Leases
SCHEDULE 3.7(B)(II) Leases Not in Full Force and Effect
SCHEDULE 3.7(B)(III) Defaults in Respect of Assumed OSi Leases and
Tarrytown Lease
SCHEDULE 3.7(B)(IV) Crompton Leases and Subleases
SCHEDULE 3.7(D) Certain Representations in Respect of Transferred
Owned OSi Property, Assumed OSi Leases and Tarrytown
Lease
SCHEDULE 3.8(A) Compliance with Laws
SCHEDULE 3.8(B) OSi Litigation
SCHEDULE 3.9(A) OSi Business Employees
SCHEDULE 3.9(B) Crompton Benefit Plans
SCHEDULE 3.9(C) Triggering Events
SCHEDULE 3.9(D) Labor Matters
vi
{PAGE}
SCHEDULE 3.9(E) Crompton Transferred Non-U.S. Retirement Plans
SCHEDULE 3.9(F) Claims
SCHEDULE 3.10 Material OSi Contracts
SCHEDULE 3.11 OSi Environmental Matters
SCHEDULE 3.12(A) Unaudited OSi Special Purpose Financial Statements
and OSi Accounting Principles
SCHEDULE 3.12(C) Exceptions to Ordinary Course
SCHEDULE 3.13(A)(I)(A) Transferred OSi Intellectual Property
SCHEDULE 3.13(A)(I)(B) OSi Licensed Intellectual Property
SCHEDULE 3.13(D) Material OSi Software
SCHEDULE 3.13(E) OSi Intellectual Property Royalties
SCHEDULE 3.13(H) Challenges to OSi Intellectual Property
SCHEDULE 3.13(L) Additional Exceptions to OSi Intellectual
Property
SCHEDULE 3.13(N) Oppositions of Third-Party Intellectual Property
Rights
SCHEDULE 3.15(B) Audit Reports and Statutes of Limitations
SCHEDULE 3.15(F) Exceptions to Representation Relating to 280G
SCHEDULE 3.15(P) OSi Tax Jurisdictions
SCHEDULE 3.16 Transactions with Affiliates
SCHEDULE 3.17 Intercompany Payables
SCHEDULE 3.18 Relationships with Customers
SCHEDULE 4.2 SC Subsidiaries
SCHEDULE 4.4(A) SC Non-Contravention
SCHEDULE 4.4(B) Required SC Consents
SCHEDULE 4.5(A) Valid Interests
SCHEDULE 4.6 SC Governmental Permits
SCHEDULE 4.7(A) Transferred Owned SC Property
SCHEDULE 4.7(D) Certain Representations in Respect of Transferred
Owned SC Property
SCHEDULE 4.8(A) Compliance with Laws
SCHEDULE 4.8(B) SC Litigation
SCHEDULE 4.9(A) SC Business Employees
SCHEDULE 4.9(B) GE Benefit Plans
SCHEDULE 4.9(C) Triggering Events
SCHEDULE 4.9(D) Labor Matters
SCHEDULE 4.9(E) GE Transferred Non-US Retirement Plans
SCHEDULE 4.9(F) Claims Schedule 4.10 Material SC Contracts
SCHEDULE 4.11 SC Environmental Matters
SCHEDULE 4.12(A) Unaudited SC Special Purpose Financial Statements
and SC Accounting Principles
SCHEDULE 4.12(C) Exceptions to Ordinary Course
SCHEDULE 4.13(A)(I) Transferred SC Intellectual Property
SCHEDULE 4.13(D) Material SC Software
SCHEDULE 4.13(E) SC Intellectual Property Royalties
SCHEDULE 4.13(H) Challenges to SC Intellectual Property
vii
{PAGE}
SCHEDULE 4.13(I) Sufficiency of Transferred SC Intellectual Property
SCHEDULE 4.13(L) Additional Exceptions to SC Intellectual Property
SCHEDULE 4.13(N) Oppositions of Third-Party Intellectual Property
Rights
SCHEDULE 4.15(E) SC Tax Jurisdictions
SCHEDULE 4.17 Intercompany Payables
SCHEDULE 4.18 Transactions with Affiliates
SCHEDULE 4.22 Relationships with Customers
SCHEDULE 4.23 Baseline CM
SCHEDULE 5.2(A) Exceptions to Conduct of OSi Business
SCHEDULE 5.2(A)(VII) OSi Business Capital Budget for 2003
SCHEDULE 5.2(B) Exceptions to Conduct of SC Business
SCHEDULE 5.2(B)(VII) SC Business Capital Budget for 2003
SCHEDULE 5.4 SC Tax Allocation
SCHEDULE 5.5(A)(III) Certain Employees
SCHEDULE 5.5(A)(IV)(A) Excluded OSi Business Employees
SCHEDULE 5.5(A)(IV)(B) Excluded SC Business Employees
SCHEDULE 5.5(F) Employment Agreements
SCHEDULE 5.6(D) Non-U.S. Retirement Plans
SCHEDULE 5.7(D) Relocation Benefits
SCHEDULE 5.8(A)(II)(A) Crompton Works Council Agreements
SCHEDULE 5.8(A)(II)(B) GE Works Council Agreements
SCHEDULE 5.14(A)(I) Exceptions to Crompton Non-Compete
SCHEDULE 5.14(A)(II) Exceptions to GE Non-Compete
SCHEDULE 5.15(B)(I) Certain OSi Business Arrangements
SCHEDULE 5.15(B)(II) Certain SC Business Arrangements
SCHEDULE 5.17(A) Certain Crompton Intercompany Arrangements
SCHEDULE 5.17(B) Certain GE Intercompany Arrangements
SCHEDULE 5.18(A) SC Backing Letters
SCHEDULE 5.18(B) OSi Backing Letters
SCHEDULE 5.22(B)(I) Aggregate Additional Costs for Year 2002
SCHEDULE 5.22(B)(II) Aggregate Additional Costs for Year 2003
SCHEDULE 8.1(B) Antitrust and Competition Approvals and Filings
SCHEDULE 9.3(E)(I)(C) OSi Business Long-Range Capital Plan
SCHEDULE 9.3(E)(II)(C) SC Business Long-Range Capital Plan
viii
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EXHIBITS
EXHIBIT 2.10(C)(III) Arbitration Procedures
EXHIBIT 4.21 Blendex Agreements
EXHIBIT 5.15(C) Term Sheet Regarding Rio Claro, Brazil
EXHIBIT 5.15(D) Term Sheet Regarding Nanjing, China
EXHIBIT A Sublease
EXHIBIT B Form of Transition Services Agreements
EXHIBIT C Shared Services Agreement
EXHIBIT D OSi Manufacturing and Services Agreement
EXHIBIT E SC Manufacturing and Services Agreement
EXHIBIT F GE Phosphites Supply Agreement
EXHIBIT G TMOS Supply Agreement
EXHIBIT H Silwet(R) Surfactant Distribution Agreement
EXHIBIT I Fomrez(R) Distribution Agreement
EXHIBIT J-1 Polybond Fiber Agreement
EXHIBIT J-2 TPV License Agreement
EXHIBIT J-3 TPV Joint Development Agreement
EXHIBITS J-4 - J-7 Transferred Intellectual Property Assignments
EXHIBIT K GE Plastics Agreement
EXHIBIT L GE Betz Agreement
EXHIBIT M Employee Lease Agreement
EXHIBIT N-1 Form of Lease Assignment
EXHIBIT N-2 Form of Sublease Assignment
ix
{PAGE}
PURCHASE AND EXCHANGE AGREEMENT
This PURCHASE AND EXCHANGE AGREEMENT (this "AGREEMENT") is made as of
April 24, 2003 by and between CROMPTON CORPORATION, a Delaware corporation
("CROMPTON"), and GENERAL ELECTRIC COMPANY, a New York corporation ("GE").
R E C I T A L S
WHEREAS, Crompton and the OSi Subsidiaries (as hereinafter defined) are,
among other things, engaged in the worldwide manufacturing, marketing, sales and
distribution of chemical products through its three strategic business units:
Silanes, Specialty Silicones and Urethane Additives; the Silanes business
produces organofunctional silanes that act as coupling agents or crosslinkers in
a variety of end use applications; the Specialty Silicones business produces
organofunctional silicone fluids and formulated products; the Urethane Additives
business produces silicone surfactants and amine catalysts that are used in the
manufacture of urethane foam (collectively, as modified by the immediately
following proviso, the "OSI BUSINESS"); PROVIDED, HOWEVER, that the OSi Business
does not include Crompton's polyurethane dispersions, polyester polyols or
castable urethane prepolymers product lines;
WHEREAS, the OSi Business is conducted with certain assets and liabilities
of Crompton and the OSi Subsidiaries;
WHEREAS, Crompton and the OSi Subsidiaries desire to sell, transfer and
assign to GE (or its designated Affiliate (as hereinafter defined)), and GE (or
its designated Affiliate) desires to purchase, accept and assume from Crompton
and the OSi Subsidiaries, the Transferred OSi Assets (as hereinafter defined)
and the Assumed OSi Liabilities (as hereinafter defined), in each case as more
fully described and upon the terms and subject to the conditions set forth
herein;
WHEREAS, GE and the SC Subsidiaries (as hereinafter defined) are, among
other things, engaged through GE's Specialty Chemicals business in (i) the
worldwide manufacture, marketing, sales, and distribution of (A) phosphite based
polymer antioxidants, including (1) a variety of specialty liquid or solid
phosphites, including phenyl, nonylphenyl, iso-decyl, iso-octyl, di-propylene
glycol, 2-ethylhexyl, BPA, C12-C15 linear alcohol, pentaerythritol, and alkyl
mercaptan esters sold under the WESTON(R) trademark, and (2) solid phosphites
including 641 (2,4,6-tri-tert-butylphenyl-2-butyl-2-ethyl-1,3-propane diol
phosphite), 626 (bis-[2,4-di-tert-butylphenyl] pentaerythritol diphosphite), 668
(tris-2,4-di-t-butylphenylphosphite) sold under the ULTRANOX(R) trademark; and a
proprietary nitrogen based processing stabilizer sold under the GENOX(TM) EP
trademark; and (B) standard and custom blends of plastic additives produced from
such antioxidants and polymer additives from external sources marketed and sold
under the ULTRANOX(R) trademark; and (C) nonylphenol primarily used in the
production of ethoxylate surfactants; and (ii) the worldwide marketing, sales,
and distribution to producers or compounders of plastic resins of impact
modifiers, heat
{PAGE}
modifiers, process aids, and specialty modifiers based primarily on ABS, SAN,
ASA, AES, AMSAN, MMASAN, PPE, PC, PS, PTFE/SAN and EBS wax and, in each case,
sold under the BLENDEX(R) trademark; an aliphatic proprietary coupling agent,
XR3430; hindered phenols including 210 (tetrakis [methylene (3,5-di-tert-butyl-
4-hydroxyhydrocinnamate)]), and 276 (octadecyl-3,5-di-tert-butyl-4-
hydroxyhydrocinnamate) sold under the ULTRANOX(R) trademark; sorbitol-based
clarifiers (di-[p-methylbenzlidene] sorbitol); and silver(Ag)ion-based
anti-microbials (collectively, the "SC BUSINESS");
WHEREAS, the SC Business is conducted with certain assets and liabilities
of GE and the SC Subsidiaries;
WHEREAS, GE and the SC Subsidiaries desire to transfer and assign to
Crompton, in partial consideration for the OSi Business, and Crompton desires to
accept and assume from GE and the SC Subsidiaries, the Transferred SC Assets (as
hereinafter defined) and the Assumed SC Liabilities (as hereinafter defined), in
each case as more fully described and upon the terms and subject to the
conditions set forth herein; and
WHEREAS, Crompton and GE desire to exchange all of the right, title and
interest of Crompton and the OSi Subsidiaries in, to and under certain
Transferred OSi Assets (and, possibly, certain Assumed OSi Liabilities) for all
of the right, title and interest of GE and the SC Subsidiaries in, to and under
certain Transferred SC Assets (and, possibly, certain Assumed SC Liabilities) in
a transaction qualifying under Section 1031 of the Code;
NOW, THEREFORE, in consideration of the mutual agreements and covenants
herein contained and intending to be legally bound hereby, the parties hereto
hereby agree as follows:
1. DEFINITIONS
1.1 DEFINED TERMS
For the purposes of this Agreement, the following terms shall have the
following meanings:
"ACQUIRED OSI SUBSIDIARIES" shall mean the OSi Business Joint Venture and
the Transferred OSi Subsidiary and each such entity shall be referred to as an
"Acquired OSi Subsidiary."
"ACQUIRED SILICONES BUSINESS" means any silicones related manufacturing,
distribution, supply or marketing business acquired by GE or its Affiliates
following the Closing Date; PROVIDED, HOWEVER, that any reorganization of assets
within the Consolidated Combined Business, including any increase in GE's equity
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