EXHIBIT 10.9
Union
Carbide Corporation and Subsidiaries
Contribution
Agreement
CONTRIBUTION
AGREEMENT (this “ Agreement ”), effective this
21st day of December, 2007, by and among Union Carbide Corporation,
a New York corporation (“ UCC ”), Dow
International Holdings Company, a Delaware corporation (“
DIHC ”) and The Dow Chemical Company, a Delaware
corporation (“ TDCC ”) (each a “
Party ” and, collectively, the “ Parties
”).
WHEREAS, UCC owns
all of the issued and outstanding equity interests of UC Investment
B.V., a private limited liability company organized under the laws
of Netherlands (the “ UCI Interests
”);
WHEREAS, TDCC
currently directly (and indirectly through its wholly owned
subsidiary Essex Specialty Products LLC) owns 92.59%, and UCC
currently owns 7.41%, of the outstanding equity interests of DIHC;
and
WHEREAS, UCC
desires to contribute to DIHC, and DIHC desires to acquire from
UCC, the UCI Interests and the Parties wish to set forth their
agreements in connection with such contribution;
NOW, THEREFORE, in consideration of the
foregoing and the respective premises, mutual covenants and
agreements of the Parties, the Parties agree as follows:
Section 1. Contribution of UCI
Interests . Upon and subject to the conditions set
forth in this agreement, UCC will contribute, assign, and transfer
the UCI Interests to DIHC (the “ Contribution ”)
by the execution of a notarial deed in the Netherlands, such deed
substantially in the form of the draft of such deed, indicated with
11097 (Document 003). DIHC shall accept such Contribution by the
execution of the same notarial deed.
Section 2. Issuance of Additional
Interests in DIHC .
(a) As
consideration for the Contribution, DIHC shall issue to UCC shares
in DIHC that will result in UCC owning an additional percentage of
the equity of DIHC (the “ Additional Equity Percentage
”) determined as follows:
Additional Equity
Percentage = ((ECV/(DIHC EV + ECV)) X 100
Where:
“ ECV ” means the contribution value of
UCI’s interest in EQUATE Petrochemical Co. K.S.C. and EQUATE
Marketing Co. E.C. (together, the “ EQUATE Companies
”) which for the purposes of this Agreement shall be deemed
to be (A) $3,011,000,000 adjusted for (B) 42.5% of
the Net Debt of the EQUATE Companies as of December 31, 2007,
as calculated by Ernst &Young, less (C) the
amount distributed to DIHC or a subsidiary thereof by the Equate
Companies in respect of the earnings of the EQUATE Companies during
their 2007 fiscal year (the “ 2008 Distribution
”); and
“ DIHC EV ” means the equity value of DIHC,
which for the purposes of this Agreement shall be deemed to be
(A) the product of 7.75 times the 2006 EBITDA (earnings
before interest, taxes, depreciation and amortization) of DIHC, as
calculated by Ernst & Young, adjusted for
(B) the Net Debt of DIHC as of December 31, 2007, as
calculated by Ernst & Young, plus (C) to the
extent not accounted for in the determination of the Net Debt of
DIHC, the value of any additional contributions made to DIHC on or
after January 1, 2007, as approved by UCC’s President,
with the value of the additional contributions as mutually agreed
upon by the Parties and incorporated into the calculation of DIHC
EV by Ernst & Young; and
“ Net Debt ” means the current and non-current
portion of long term debt less cash and cash equivalents (including
intercompany notes payable and receivable and related
interest).
DIHC shall issue
such additional shares to UCC within thirty (30) business days
after delivery by Ernst & Young to the
