Unaudited pro forma condensed combined financial statements of
Olin and the Dow Chlorine Products Business

The following unaudited pro forma condensed combined financial statements present the combination of the historical financial statements of Olin and DCP, adjusted to give effect to: (1) the Merger and (2) the other Transactions.  Capitalized terms used herein are defined below under the caption “Helpful Definitions”.

The unaudited pro forma condensed combined statements of operations for the six months ended June 30, 2015 and the year ended December 31, 2014 combine the historical consolidated statement of operations of Olin and the historical combined statement of income (loss) for DCP, giving effect to the Merger and the other Transactions as if they had been consummated on January 1, 2014, the beginning of the earliest period presented. The unaudited pro forma condensed combined balance sheet combines the historical condensed consolidated balance sheet of Olin and the historical condensed combined balance sheet of DCP as of June 30, 2015, giving effect to the Merger and the other Transactions as if they had been consummated on June 30, 2015.

The unaudited pro forma condensed combined financial statements were prepared using the acquisition method of accounting with Olin considered the acquirer of DCP. Under the acquisition method of accounting, the purchase price is allocated to the underlying tangible and intangible assets acquired and liabilities assumed based on their respective fair values, with any excess purchase price allocated to goodwill. The pro forma purchase price allocation was based on a preliminary estimate of the fair values of the tangible and intangible assets and liabilities of DCP. In arriving at the estimated fair values, Olin has considered the preliminary appraisals of independent consultants which were based on a preliminary and limited review of the assets and liabilities related to DCP to be transferred to, or assumed by, Splitco in the Transactions. Now that the Transactions have closed, Olin will complete the purchase price allocation after considering the fair value of DCP’s assets and liabilities at the level of detail necessary to finalize the required purchase price allocation. The final purchase price allocation may be different than that reflected in the pro forma purchase price allocation presented herein, and this difference may be material.

The historical combined financial statements of DCP have been “carved-out” from TDCC’s consolidated financial statements and reflect assumptions and allocations made by TDCC. DCP’s historical combined financial statements include all revenues, costs, assets and liabilities that are directly attributable to DCP. In addition, certain expenses reflected in DCP’s combined financial statements are an allocation from TDCC. Such expenses include, but are not limited to, general corporate expenses related to finance, legal, information technology, human resources, ethics and compliance, shared services, employee benefits and incentive, insurance and stock-based compensation. The actual costs that may have been incurred if DCP had been a stand-alone company would depend on a number of factors, including the chosen organizational structure and strategic decisions made as to information technology and infrastructure requirements. As such, DCP’s combined financial statements do not necessarily reflect what DCP’s financial condition and results of operations would have been had DCP operated as a stand-alone company during the period or at the date presented.

The unaudited pro forma condensed combined financial statements do not reflect the costs of any integration activities or benefits that may result from realization of approximately $200 million of annualized cost synergies expected to be realized within three years following the consummation of the Transactions, or, if Olin is able to increase sales to new third-party customers and access new product markets as a result of the Transactions, the potential additional annualized synergies of up to $100 million that Olin estimates may potentially be achievable within three years from the consummation of the Transactions. Olin expects to incur significant one-time costs in connection with the Transactions, including approximately (1) $55 to $60 million during 2015 of advisory, legal, accounting, integration and other professional fees related to the Transactions, (2) $25 to $30 million of financing-related fees, (3) $50 million of costs associated with the change in control mandatory acceleration of expenses under deferred compensation plans as a result of the Transactions, (4) $100 to $150 million in transition-related costs during the first three years following the consummation of the Transactions, and (5) $200 million in incremental capital spending during the first three years following the consummation of the Transactions that Olin management believes is necessary to realize the anticipated synergies from the Transactions.

 

 

The unaudited pro forma adjustments are based upon current available information and assumptions that Olin believes to be reasonable. The pro forma adjustments and related assumptions are described in the accompanying notes presented on the following pages.

The unaudited pro forma condensed combined financial statements are for informational purposes only and are not intended to represent or to be indicative of the actual results of operations or financial position that the combined Olin and DCP would have reported had the Transactions been completed as of the dates set forth in the unaudited pro forma condensed combined financial statements and should not be taken as being indicative of Olin’s future consolidated results of operations or financial position. The actual results may differ significantly from those reflected in the unaudited pro forma condensed combined financial statements for a number of reasons, including, but not limited to, differences between the assumptions used to prepare the unaudited pro forma condensed combined financial statements and actual amounts. As a result, the pro forma combined information does not purport to be indicative of what the financial condition or results of operations would have been had the Transactions been completed on the applicable dates of the unaudited pro forma condensed combined financial statements.

The unaudited pro forma condensed combined financial statements, including the notes thereto, should be read in conjunction with:

 

 

 

 

Unaudited pro forma condensed combined balance sheet as of June 30, 2015

 

		Historical
		Olin Corporation				Dow Chlorine Products Business				Pro forma adjustments				Note 3				Pro forma condensed combined
		(in millions)
Current assets
Cash and cash equivalents		$	232			$	—			$	(257	)			A			$	(25	)
Receivables, net			321				332				45				B				698
Income taxes receivable			3				—				39				D				42
Inventories			222				325				68				C				615
Current deferred income taxes			50				23				(15	)			D				58
Restricted cash			—				26				—								26
Other current assets			16				—				—								16
Total current assets			844				706				(120	)							1,430
Property, plant and equipment, net			918				1,525				1,900				E				4,343
Intangibles, net			116				3				1,309				F				1,428
Deferred income taxes			13				1				(1	)			D				13
Other assets			63				15				29				H				107
Goodwill			747				56				864				G				1,667
Total assets		$	2,701			$	2,306			$	3,981							$	8,988
Current liabilities
Current installments of long-term debt		$	144			$	51			$	11				H			$	206
Accounts payable			149				372				(5	)			I				516
Income taxes payable			11				16				(16	)			D				11
Current deferred income taxes			—				—				23				D				23
Accrued liabilities			205				65				(58	)			J				212
Total current liabilities			509				504				(45	)							968
Long-term debt			528				528				2,433				H				3,489
Accrued pension liability			152				—				377				K				529
Deferred income taxes			100				77				916				D				1,093
Other liabilities			359				143				(145	)			L				357
Total liabilities			1,648				1,252				3,536								6,436
Commitments and contingencies
Shareholders’ equity
Common stock			78				—				87				N				165
Additional paid-in capital			794				—				1,440				N				2,234
Accumulated other comprehensive (loss) income			(434	)			28				(7	)			N				(413	)
Retained earnings			615				—				(49	)			N				566
Net parent investment			—				912				(912	)			N				—
Total shareholders’ equity			1,053				940				559								2,552
Noncontrolling interest			—				114				(114	)			M				—
Total combined shareholders’ equity			1,053				1,054				445				D				2,552
Total liabilities and shareholders’ equity		$	2,701			$	2,306			$	3,981							$	8,988

 

See accompanying notes to the unaudited pro forma condensed combined financial statements.

Unaudited pro forma condensed combined statement of operations for the six months ended June 30, 2015

 

 

 

 

Unaudited pro forma condensed combined statement of operations for the year ended December 31, 2014

 

		Historical
		Olin Corporation				Dow Chlorine Products Business				Pro forma adjustments				Note 4				Pro forma condensed combined
		(in millions, except per share data)
Sales		$	2,241			$	4,776			$	(69	)			O			$	6,948
Operating expenses
Cost of goods sold			1,853				4,573				(64	)			P				6,362
Selling and administration			166				186				(16	)			Q				336
Restructuring charges			16				—				—								16
Acquisition-related costs			4				—				(4	)			R				—
Other operating income (loss)			2				(3	)			—								(1	)
Operating income			204				14				15								233
Earnings of non-consolidated affiliates			2				—				—								2
Interest expense			44				13				139				S				196
Interest income			1				—				—								1
Income (loss) from continuing operations before taxes			163				1				(124	)							40
Income tax provisions (benefits)			58				8				(46	)			T				20
Net income (loss) from continuing operations		$	105			$	(7	)		$	(78	)						$	20
Net income (loss) from continuing operations attributable to    noncontrolling interests			—				(5	)			5				U				—
Net income (loss) from continuing operations attributable to the    business		$	105			$	(2	)		$	(83	)						$	20
Net income from continuing operations per common share attributable to the business
Basic		$	1.33				—				—							$	0.12
Diluted		$	1.32				—				—							$	0.12
Average common shares outstanding							—				—
Basic			78.6				—				87.5				V				166.1
Diluted			79.7				—				87.5				V				167.2

 

See accompanying notes to the unaudited pro forma condensed combined financial statements.

 

 

 

Olin Corporation and subsidiaries notes to the unaudited pro forma condensed combined financial statements

Note 1.  Basis of presentation

The accompanying unaudited pro forma condensed combined financial statements were prepared in accordance with Article 11 of Regulation S-X and present the pro forma combined financial position and results of operations of Olin based upon the historical financial statements of each of Olin and DCP, after giving effect to the Merger and the other Transactions, and are intended to reflect the impact of the Merger and the other Transactions on Olin’s consolidated financial statements. The accompanying unaudited pro forma condensed combined financial statements have been prepared using, and should be read in conjunction with, the respective unaudited consolidated or combined (as the case may be) financial statements of each of Olin and DCP as of and for the six months ended June 30, 2015 and the audited consolidated or combined (as the case may be) financial statements of each of Olin and DCP as of and for the year ended December 31, 2014. Assumptions and estimates underlying the pro forma adjustments are described in these notes. Since the accompanying unaudited pro forma condensed combined financial statements have been prepared based upon preliminary estimates and assumptions, the final amounts recorded may change these estimates as a more in-depth analysis will be carried out now that the Transactions have closed and such differences may be material.

The accompanying unaudited pro forma condensed combined financial statements are presented for illustrative purposes only and do not purport to be indicative of the actual results that would have been achieved by Olin if the Transactions had been consummated for the periods presented or that will be achieved in the future. The unaudited pro forma condensed combined financial statements do not reflect the costs of any integration activities or benefits that may result from realization of synergies expected to result from the Transactions. In addition, throughout the period presented in the unaudited pro forma condensed combined financial statements, the operations of DCP were conducted and accounted for as part of TDCC. DCP’s audited condensed financial statements have been derived from TDCC’s historical accounting records and reflect certain allocations of direct costs and expenses. All of the allocations and estimates in such financial statements are based on assumptions that the management of TDCC believes are reasonable. In the opinion of management, the unaudited pro forma condensed combined financial statements include all normal and recurring adjustments that are considered necessary for the fair presentation of the results for the period presented. DCP’s financial statements do not necessarily represent the financial position of DCP had it been operated as a stand-alone company during the period or at the date presented.

The unaudited pro forma condensed combined statement of operations combines the historical consolidated statement of operations of Olin and the historical combined statement of income (loss) of DCP for the six months ended June 30, 2015 and for the year ended December 31, 2014, giving effect to the Merger and the other Transactions as if they had been consummated on January 1, 2014. The unaudited pro forma condensed combined balance sheet combines the historical condensed consolidated balance sheet of Olin and the historical condensed combined balance sheet of DCP as of June 30, 2015, giving effect to the Merger and the other Transactions and adjustments described in these notes, as if the Transactions had been consummated on June 30, 2015.

The unaudited pro forma condensed combined financial statements were prepared using the acquisition method of accounting with Olin considered the acquirer of DCP. The audited historical combined financial statements of DCP have been adjusted to reflect certain reclassifications in order to conform to Olin’s financial statement presentation.

 

 

 

Note 2.  Purchase price allocation

The unaudited pro forma condensed combined balance sheet has been adjusted to reflect the allocation of the preliminary estimated purchase price to identifiable assets to be acquired and liabilities to be assumed, with the excess recorded as goodwill. The final purchase price allocation may be different than that reflected in the pro forma purchase price allocation presented herein, and this difference may be material. The purchase price allocation in these unaudited pro forma condensed combined financial statements is based upon an estimated purchase price of approximately $5,078 million. This amount was derived in accordance with the Merger Agreement, as described further below, based on the closing price of Olin common stock on October 2, 2015 and 87,482,759 shares of Olin common stock being issued in the Merger, and is subject to adjustment based on Splitco’s working capital in accordance with the terms of the Separation Agreement. The preliminary working capital adjustment of $50 million is reflected in the pro forma information.

The following table represents the preliminary estimate of the purchase price paid in the Merger (in millions, except per share data):

The closing price of Olin common stock on October 2, 2015 was $17.46 per share.

The assumption of the U.S. pension liabilities and the pension election cash payment reflect the election by TDCC to transfer $273 million of net U.S. pension liability to Olin as of the closing date of the Merger in accordance with the Employee Matters Agreement. These amounts are subject to adjustment based on the actual value, determined as of the closing date of the Merger, of the U.S. pension liability and related assets that are transferred to Olin by TDCC. If the actual value, as of the closing date of the Merger, of the net U.S. pension liability transferred by TDCC to Olin is less than $400 million, Olin will be obligated to pay TDCC an amount in cash equal to the product of (x) and (y), where (x) equals (1) $400 million minus (2) the net U.S. pension liability transferred and (y) equals 0.5. This means, based on TDCC’s election, Olin would be required to pay approximately $64 million in cash consideration. Because the actual value of the net U.S. pension liability to be transferred to Olin may be greater or less than $273 million, the final purchase price could differ from the current estimate, which could impact the unaudited pro forma condensed combined financial statements.

 

 

 

The preliminary estimated purchase price is allocated as follows (in millions):

Assets and liabilities for which initial accounting is incomplete:

 

 

 

Note 3.  Balance sheet adjustments

The unaudited pro forma condensed combined balance sheet reflects the following adjustments ($ in millions):

 

(A)	Cash and cash equivalents were adjusted as follows:

 

 

 

 

 

 

 

 

 

 

 

 

(E)	Property, plant and equipment, net were adjusted as follows:

 

 

(F)	Intangibles, net were adjusted as follows:

 

(G)	Goodwill was adjusted as follows:

 

(H)	Other assets, current installments of long-term debt and long-term debt were adjusted as described below in Note 5, Financing adjustments.

 

(J)	Accrued liabilities were adjusted as follows:

 

 

 

 

 

 

 

Note 4.  Income statement adjustments

The unaudited pro forma condensed combined statement of operations reflects the following adjustments (in millions):

 

(O)	Sales were adjusted as follows:

 

 

(1)	Relates to adjustments to sales related to operations and commercial arrangements that were not transferred and commercial arrangements transferred in accordance with the Separation Agreement.
(2)	Represents the re-pricing of sales to TDCC relating to arrangements for long-term supply agreements for the sale of raw materials and services pursuant to the Separation Agreement. These agreements were executed on the closing date of the Merger. This pro forma adjustment represents changes in sales that would have been generated due to these agreements had they been in place on January 1, 2014.
(3)	Represents the elimination of DCP’s sales to Olin as reported in DCP’s historical statement of operations. There were no sales transactions from Olin to DCP for the six months ended June 30, 2015 or the year ended December 31, 2014.

 

 

 

(1)	Represents the adjustment to DCP’s historical depreciation and amortization as a result of preliminary fair value adjustments to the acquired depreciable assets and amortizable intangible assets and adjustments to their respective estimated remaining useful lives, see Notes 3(E) and 3(F).
(2)	Represents adjustments to expenses related to operations and commercial arrangements that were not transferred and additional assets and commercial arrangements transferred in accordance with the Separation Agreement. This adjustment also includes a reduction of $9 million for the six months ended June 30, 2015 and $12 million for the fiscal year ended December 31, 2014 associated with environmental expenses that were attributable to production sites not being transferred. See Note 6, Items Not Included.
(3)	Relates to arrangements for long-term supply agreements for raw materials, including ethylene and benzene, and services pursuant to the Separation Agreement. These agreements were executed on the closing date of the Merger. This pro forma adjustment represents changes in raw material costs and operating expenses that would have been incurred due to these agreements had they been in place on January 1, 2014.
(4)	Represents the elimination of DCP’s sales to Olin as reported in DCP’s historical statement of operations. There were no sales transactions from Olin to DCP for the six months ended June 30, 2015 or the fiscal year ended December 31, 2014.

 

 

 

 

 

 

Note 5.  Financing adjustments

On the closing date of the Merger, Olin and Splitco incurred indebtedness of approximately $1,950 million, which consisted of $1,350 million of term loans under the Senior Term Facilities and $600 million of term loans under the Sumitomo Term Facility, to (i) finance the Special Payment, (ii) pay fees and expenses of Olin in connection with the Transactions, (iii) refinance the terms loans outstanding under the Existing Credit Facilities, (iv) refinance indebtedness of the JV Entity under the JV Credit Agreement, (v) finance the required cash payment to TDCC based on TDCC’s U.S. pension liability election, (vi) make other payments in connection with the Transactions and (vii) to the extent net proceeds remain, fund general corporate purposes. In addition, Splitco issued the Splitco Securities to TDCC in connection with the Debt Exchange. Upon consummation of the Merger, Olin and Splitco entered into agreements to guarantee each other’s obligations under this indebtedness.

Olin is currently seeking commitments under the New Term Facility, the proceeds of which would be used after the closing date of the Merger for working capital and other general corporate purposes. Olin makes no assurance it will obtain any new commitments, and such commitments are not reflected in the unaudited pro forma condensed combined financial statements.

Current installments of long-term debt were adjusted as follows (in millions):

 

(1)	Represents the current portion of borrowings under the Senior Term Facilities. Olin and Splitco obtained $1,350 million of separate commitments for term loans and drew the entire amount in order to finance the Transactions. The annual average interest rate included in the unaudited pro forma condensed combined statement of operations with respect to the Senior Term Facilities is based on the terms of the commitments.
(2)	Represents repayment by Olin of the current portion of the term loans outstanding under the Existing Credit Facilities. These term loans were repaid with the proceeds of the Senior Credit Facilities.
(3)	Represents repayment by Olin of the current portion of indebtedness of the JV Entity under the JV Credit Agreement. This debt was repaid with the proceeds of the Sumitomo Term Facility.

Long-term debt was adjusted as follows (in millions):

 

 

(1)	Represents the notes issued by Splitco to TDCC immediately prior to the Distribution. The Splitco Securities were transferred by TDCC on the closing date of the Merger to investment banks and/or commercial banks in exchange for existing debt of TDCC.
(2)	Represents the long-term portion of borrowings under the Senior Term Facilities. Olin and Splitco obtained $1,350 million of separate commitments for term loans and drew the entire amount in order to finance the Transactions. The annual average interest rate included in the unaudited pro forma condensed combined statement of operations with respect to the Senior Term Facilities is based on the terms of the commitments.
(3)	Represents borrowings under the Sumitomo Term Facility. Olin obtained $600 million of commitments for term loans and drew the entire amount in order to refinance indebtedness of the JV Entity under the JV Credit Agreement and to pay fees and expenses of Olin and make other payments in connection with the Transactions.
(4)	Represents repayment by Olin of the long-term portion of the term loans outstanding under the Existing Credit Facilities. These term loans were repaid with proceeds of the new indebtedness incurred by Olin.
(5)	Represents repayment by Olin of the long-term portion of indebtedness of the JV Entity under the JV Credit Agreement. This debt was repaid with the proceeds of the new indebtedness incurred by Olin.
(6)	To adjust certain liabilities included in DCP’s historical balance sheet to align with what was transferred in accordance with the Separation Agreement. Certain debt liabilities were repaid prior to the closing of the Merger.

 

 

 

 

Other assets were adjusted as follows (in millions):

 

The unaudited pro forma condensed combined statement of operations reflects adjustments to include an estimate of the interest expense on the additional indebtedness incurred in connection with the Transactions.

A summary of the adjustments to current installments of long-term debt, long-term debt and interest expense is as follows (in millions):

 

 

 

 

Note 6.  Items not included

The following expected material nonrecurring charges related to the Merger and the other Transactions are not included or provided for in the unaudited pro forma condensed combined statement of operations:

 

●	an additional preliminary estimate of $15 to $20 million of advisory, legal, accounting and other professional fees incurred in connection with the Transactions during the remainder of 2015; and
●	approximately $50 million of costs associated with the change in control mandatory acceleration of expenses under the Olin non-qualified pension plan that resulted from consummation of the Transactions.

The unaudited pro forma condensed combined financial statements do not reflect benefits that may result from the realization of savings for costs allocated to DCP from TDCC. Included in DCP’s combined statement of operations within the unaudited pro forma condensed combined financial statements are allocations of certain expenses for services including, but not limited to, general corporate expenses related to finance, legal, information technology, human resources, ethics and compliance, shared services, employee benefits and incentives, insurance and stock-based compensation. These expenses have been allocated on the basis of direct usage when identifiable with the remainder allocated on the basis of headcount or other measures. The allocations may not reflect the expense that would have been incurred as a part of Olin. Olin management estimates that approximately $250 million of annual costs would not have been incurred by DCP had DCP been a part of Olin for the year ended December 31, 2014.

The unaudited pro forma condensed combined financial statements also do not reflect benefits that may result from the realization of approximately $200 million of annualized cost synergies expected to be realized within three years following the consummation of the Transactions, or, if Olin is able to increase sales to new third-party customers and access new product markets as a result of the Transactions, the potential additional annualized synergies of up to $100 million that Olin estimates may potentially be achievable within three years from the consummation of the Transactions. Olin expects to incur significant one-time costs in connection with the Transactions, including approximately (1) $55 to $60 million during 2015 of advisory, legal, accounting, integration and other professional fees related to the Transactions, (2) $25 to $30 million of financing-related fees, (3) $50 million of costs associated with the change in control mandatory acceleration of expenses under deferred compensation plans as a result of the Transactions, (4) $100 to $150 million in transition-related costs during the first three years following the consummation of the Transactions, and (5) $200 million in incremental capital spending during the first three years following the consummation of the Transactions that Olin management believes is necessary to realize the anticipated synergies from the Transactions.

The unaudited pro forma condensed combined balance sheet does not include an environmental liability for DCP, which is consistent with the Separation Agreement. The historical combined statements of operations for DCP included environmental remediation expense of $15 million for the six months ended June 30, 2015 and $30 million for the year ended December 31, 2014. The unaudited pro forma condensed combined statements of operations include a reduction of $9 million for the six months ended June 30, 2015 and $12 million for the year ended December 31, 2014 attributable to production sites not being transferred.

The unaudited pro forma condensed combined balance sheet includes a de-recognition of trade accounts receivable of $45 million in DCP’s unaudited historical balance sheet. DCP’s trade accounts receivable were subject to inclusion in TDCC’s various trade accounts receivable securitization programs whereby trade accounts receivable of select entities were sold on a revolving basis to certain multi-seller commercial paper conduit entities. The trade accounts receivable assigned to Splitco in the Merger include the full trade accounts receivable of DCP with no similar de-recognition.

 

 

 

 

As of June 30, 2015, Olin had a valuation allowance of $17 million recorded on its deferred tax assets. This valuation allowance relates predominately to Olin’s state net operating losses, state tax credit and capital loss carry-forwards. As part of the purchase price allocation process resulting from the Merger, it is possible that deferred tax liabilities will be recorded in the various domestic jurisdictions that, if recorded, could result in a release of a portion of the valuation allowance. Any release of a valuation allowance on Olin’s pre-Merger deferred tax assets will be recorded in the income statement in the period that the Merger is completed; however no such adjustment is included in the unaudited pro forma condensed combined financial statements due to its nonrecurring nature.

Olin is currently seeking commitments under the New Term Facility, the proceeds of which would be used after the closing date of the Merger for working capital and other general corporate purposes. Olin makes no assurance it will obtain any new commitments, and such commitments are not reflected in the unaudited pro forma condensed combined financial statements.

18

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HELPFUL DEFINITIONS

● “Below Basis Amount” means $875 million;

● “Contribution” means the contribution by TDCC, directly or indirectly, of the equity interests in the DCP Subsidiaries to Splitco pursuant to the Separation Agreement;

● “DCP Subsidiaries” refers to the newly-formed direct and indirect subsidiaries of TDCC that hold the transferred assets and certain assumed liabilities related to DCP following the Separation and were contributed to Splitco prior to the consummation of the Distribution, pursuant to the Contribution;

●  “Debt Exchange” means the transfer of the Splitco Securities by TDCC on or about the closing date of the Merger to the investment banks and/or commercial banks in exchange for existing TDCC debt;

●  “Distribution” means the distribution by TDCC of its shares of Splitco common stock to the holders of shares of TDCC common stock by way of an exchange offer;

●  “Dow Chlorine Products Business” or “DCP” means TDCC’s U.S. chlor-alkali and vinyl, global epoxy and global chlorinated organics business, including TDCC’s equity interests in the JV Entity;

●  “Employee Matters Agreement” means the Employee Matters Agreement, dated as of March 26, 2015, among TDCC, Spinco and Olin;

●  “Ethylene Agreements” means certain 20-year long-term capacity rights agreements for the supply of ethylene by TDCC to Olin at producer economics;

●  “Splitco Securities” means the notes issued by Splitco to TDCC immediately prior to the Distribution in connection with the Transactions;

●  “Existing Credit Facilities” means Olin’s $410 million senior credit facilities, dated June 24, 2014;

●  “JV Credit Agreement” means the Credit Agreement governing the existing indebtedness of the JV Entity;

●  “JV Entity” means Dow-Mitsui Chlor-Alkali LLC, a joint venture between TDCC and Mitsui & Co. Texas Chlor-Alkali, Inc.;

●  “JV Partner” means Mitsui & Co. Texas Chlor-Alkali, Inc.;

●  “Merger” means the combination of Olin’s business and the Dow Chlorine Products Business through the merger of Merger Sub with and into Splitco, whereby the separate corporate existence of Merger Sub will cease and Splitco will continue as the surviving company and as a wholly-owned subsidiary of Olin, as contemplated by the Merger Agreement;

●  “Merger Agreement” means the Agreement and Plan of Merger, dated as of March 26, 2015, among TDCC, Splitco, Olin and Merger Sub;

●  “Merger Sub” means Blue Cube Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of Olin;

●  “New Term Facility” means the commitments that Olin is currently seeking under an upsize of an existing credit facility or a proposed new term loan facility;

●  “Olin” means Olin Corporation;

●  “Olin common stock” means the common stock, par value $1 per share, of Olin;

 

 

●  “Olin Credit Facilities” means, collectively, the Olin Term Facility and the Olin Revolving Facility;

●  “Olin Term Facility” means the term facility under the Olin Credit Agreement;

●  “Olin Credit Agreement” means the Credit Agreement, dated as of June 23, 2015, among Olin and Olin Canada ULC, the lenders party thereto and Wells Fargo Bank, National Association, as administrative agent;

●  “Olin Revolving Facility” means the revolving facility under the Olin Credit Agreement;

●  “Senior Credit Facilities” means, collectively, the Olin Credit Facilities and the Splitco Term Facility;

●  “Senior Term Facilities” means collectively, the Olin Term Facility and the Splitco Term Facility;

●  “Separation” means the transfer by TDCC to Splitco or the DCP Subsidiaries directly or indirectly of the transferred assets and certain assumed liabilities related to DCP pursuant to the Separation Agreement;

●  “Separation Agreement” means the Separation Agreement, dated as of March 26, 2015, among TDCC and Splitco;

●  “Special Payment” means the cash payment to be made in connection with the Transactions by Splitco to TDCC in an amount equal to the Below Basis Amount;

●  “Splitco” means Blue Cube Spinco Inc., a Delaware corporation, and prior to the Merger, a wholly-owned subsidiary of TDCC;

●  “Splitco Credit Agreement” means the Credit Agreement, dated as of June 23, 2015, with a syndicate of lenders and Wells Fargo Bank, National Association, as administrative agent;

●  “Splitco Term Facility” means the term facility under the Splitco Credit Agreement under which Splitco may obtain term loans in an aggregate amount of up to the lesser of (i) $1,050 million and (ii) the Below Basis Amount;

●  “Sumitomo Credit Agreement” means the Credit Agreement, dated August 25, 2015, among Olin, certain lenders and Sumitomo Mitsui Banking Corporation, as administrative agent;

●  “Sumitomo Term Facility” means the term facility under the Sumitomo Credit Agreement under which Olin may obtain terms loans in an aggrerate amount of up to $600 million;

●  “Tag Event” means the exercise by the JV Partner prior to the closing date of the Merger of its right to transfer all of its equity interests in the JV Entity to TDCC or TDCC’s designee in connection with the Transactions pursuant to the organizational documents of the JV Entity;

●  “TDCC” means The Dow Chemical Company, a Delaware corporation; and

●  “Transactions” means the transactions contemplated by the Merger Agreement and the Separation Agreement, which provide for, among other things, the Separation, the Contribution, the Distribution and the Merger.