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Exhibit 10.16
Execution Copy
ALTERNATIVE DISPUTE RESOLUTION AGREEMENT
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ALTERNATIVE DISPUTE RESOLUTION AGREEMENT (the "Agreement") dated
September 30, 1999 by and between GENCORP INC., an Ohio corporation ("GenCorp")
and OMNOVA Solutions Inc., an Ohio corporation ("OMNOVA").
This Agreement is made pursuant to the Distribution Agreement dated as
of the date hereof between GenCorp and OMNOVA ("Distribution Agreement"). Each
term used herein that is defined in the Distribution Agreement shall have the
same meaning when used herein as it is given in the Distribution Agreement.
WHEREAS, GenCorp and OMNOVA have determined that it is necessary and
desirable to agree on the procedures described in this Agreement as the sole and
exclusive method or remedy for them to resolve every dispute, controversy or
claim whether sounding in contract, tort or otherwise (hereinafter "Dispute")
which may from time to time arise under or out of, or is in any way related to,
the Transaction Documents or the Distribution (as herein defined); and,
WHEREAS, this Agreement shall apply whether such Dispute is based on a
breach of one party or its obligations under the Transaction Documents or
disagreement between the parties as to the meaning or application of the
Transaction Documents or in any manner related to or arising under or out of the
Distribution or the transactions contemplated by the Transaction Documents
(including all actions taken in furtherance of said Distribution).
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained in this Agreement, the parties hereby agree as follows:
ARTICLE I
As used in this Agreement, the following terms shall have the following
meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined):
AMOUNT IN CONTROVERSY: the monetary value of any Dispute plus the
monetary value of any related Dispute or series of related Disputes
then existing or likely to occur in the future.
APPLICABLE DEADLINE: one year and 45 days after the later of the
occurrence of the act or event giving rise to the claim underlying the
Dispute or the date on which such act or event was, or should have
been, in the exercise of reasonable due diligence, discovered by the
party asserting the claim; provided, however, that with respect to
Disputes involving Third Party Claims the applicable act or event shall
be the making of such Third Party Claim.
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CPR: the Center for Public Resources, Inc., New York, NY.
DEMAND: a written demand for arbitration under Article IV of this
Agreement which shall contain a statement setting forth the nature of
the Dispute and the Amount in Controversy.
DISPUTE: is defined in the recitals to this Agreement.
ESCALATION NOTICE: a written notice demanding a meeting of the
respective Chief Executive Officers of the parties for the purpose of
resolving a Dispute.
REQUEST: a written request for mediation under Article III of this
Agreement which shall set forth the nature of the Dispute and the
Amount in Controversy.
TRANSACTION DOCUMENTS: the Distribution Agreement together with the
Ancillary Agreements and other documents referenced in the Distribution
Agreement.
ARTICLE II
RESOLUTION OF DISPUTES
Section 2.01. INTENT. It is the intent of the parties to use their
respective reasonable efforts to resolve expeditiously and on a mutually
acceptable negotiated basis any Dispute between them that may arise from time to
time.
Section 2.02. WAIVER OF RIGHTS. The procedures in this Agreement shall
be the sole and exclusive remedy in connection with any Dispute. Each party to
this Agreement hereby irrevocably waives any rights it may have to trial by jury
or to commence any action in any court of law or equity or before any other
governmental authority with respect to any Dispute, except as expressly
otherwise provided in Sections 4.05(b) and 4.06 of Article IV of this Agreement.
Section 2.03. PROCEDURE. All Disputes between the parties should be
resolved promptly through consultation and good faith negotiation at the working
levels of GenCorp and OMNOVA. All Disputes which cannot be resolved by the
parties at the working level shall first be subjected to escalation as provided
in Section 2.04 of this Article. If escalation does not resolve the Dispute, the
Dispute shall next be submitted to mediation pursuant to Article III of this
Agreement. Subject to Sections 4.05(b) and 4.06 of Article IV of this Agreement,
if a Dispute cannot be resolved through mediation, then such Dispute shall be
submitted to binding Arbitration pursuant to Article IV of this Agreement.
Section 2.04. ESCALATION. If the parties are unable to resolve a
Dispute at working levels within GenCorp and OMNOVA, either party may deliver an
Escalation Notice to the other party demanding an in-person meeting for the
purpose of resolving the Dispute between the Chief Executive Officers ("CEOs")
of both parties in Denver, Colorado, within thirty days
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of receipt of the Escalation Notice. The Escalation Notice shall be delivered in
accordance with Section 5.04 of Article V of this Agreement. The CEO's of the
parties shall have fifteen days following their meeting to resolve the Dispute.
If the Dispute is not resolved within the foregoing period, and in any event
after forty-five days following receipt of an Escalation Notice, either party
may initiate mediation of the Dispute in accordance with Article III of this
Agreement.
ARTICLE III
MEDIATION
Section 3.01. REQUEST FOR MEDIATION. Following completion of the
escalation procedure described in Section 2.04 of Article II of this Agreement,
either party may initiate mediation by delivering a Request to the other party
in accordance with Section 5.04 of Article V of this Agreement.
Section 3.02. APPOINTMENT OF MEDIATOR. Unless the parties otherwise
agree in writing, a single mediator will be appointed by the two parties from
among the former directors of GenCorp who ceased to be members of the GenCorp
Board of Directors at least six months before the Distribution. In the event the
parties are unable to agree upon a mediator or no such former director is
available, the parties shall apply to CPR to appoint a single mediator from the
CPR Panel of Neutrals, which appointment shall be made by CPR within 15 days
after such application.
Section 3.03. DATE, TIME AND PLACE. The date, time and place of each
mediation session shall be determined by agreement of the parties or, if the
parties cannot agree within a reasonable period of time, by the mediator;
provided that the first mediation session shall be held within fifteen (15) days
of the date on which the mediator is appointed. Unless the parties otherwise
agree in writing, all mediation proceedings shall take place in Denver,
Colorado.
Section 3.04. ROLE OF THE MEDIATOR. The mediator shall aid the parties
in their discussions and negotiations by informally advising the parties. Any
opinion expressed by the mediator shall be strictly advisory and shall not be
binding on the parties; provided, however, any final, written opinion expressed
by the mediator shall be admissible in any arbitration proceedings.
Section 3.05. COSTS OF MEDIATION. Costs of the mediation shall be borne
equally by the parties, except that each party shall be responsible for its own
attorney's fees and expenses.
Section 3.06. TERMINATION. The mediation proceedings shall be
terminated upon the happening of any of the following: (i) execution of a
settlement agreement by the parties; (ii) receipt of a written declaration of
the mediator that further efforts at mediation are no longer worthwhile; or,
(iii) receipt of a written declaration of one or both parties that the mediation
proceedings are terminated, which is delivered (in accordance with Section 5.04
of Article V of this Agreement) not earlier than completion of the first
mediation session.
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ARTICLE IV
ARBITRATION
Section 4.01. DEMAND FOR ARBITRATION. (a) At any time after the
termination of mediation as described in Section 3.06 of Article III of this
Agreement, any party may, unless the Applicable Deadline has occurred, make a
Demand that the Dispute be resolved by binding arbitration, which Demand shall
be delivered in the manner set forth in Section 5.04 of Article V of this
Agreement. In the event that any party shall deliver a Demand, the other party
may itself deliver a Demand to such first party with respect to any related
Dispute (with respect to which the Applicable Deadline has not passed) without
the requirement of delivering an Escalation Notice or a Request. In the event
that any party delivers a Demand with respect to any Dispute that is the subject
of any then pending arbitration proceeding or of a previously delivered Demand,
all such Disputes shall be resolved in the arbitration proceeding for which a
Demand was first delivered unless the arbitrator in his or her sole discretion
determines that it is impracticable or otherwise inadvisable to do so.
(b) Except as may be expressly provided in any Transaction
Document, any Demand must be given prior to the Applicable Deadline. The parties
may specifically agree in writing to extend or waive the Applicable Deadline
with respect to any Dispute; however, no discussions, negotiations or mediations
between the parties pursuant to this Agreement, or otherwise, will toll the
Applicable Deadline unless expressly agreed in writing by the parties. Each of
the parties agrees that if a Demand is not given prior to the expiration of the
Applicable Deadline, as between or among the parties, such Dispute will be
barred; provided, however, that if there is a Dispute regarding whether the
Applicable Deadline has expired such Dispute shall be resolved by the
Arbitrator. Subject to Sections 4.05(c) and 4.06 of Article IV of this Agreement
and the preceding sentence, upon delivery of a Demand prior to the Applicable
Deadline, the Dispute shall be decided by a sole arbitrator in accordance with
the rules set forth in this Article IV.
Section 4.02. ARBITRATORS. (a) Within 15 days after a valid Demand is
received, the parties shall attempt to select a sole arbitrator satisfactory to
both parties.
(b) In the event that the parties are not able jointly to
select a sole arbitrator within such 15-day period, the parties shall each
appoint an arbitrator (who need not be disinterested as to the parties or the
matter) within 30 days after delivery of the Demand. If one party appoints an
arbitrator within such time period and the other party fails to appoint an
arbitrator within such time period, the arbitrator appointed by the one party
shall be the sole arbitrator of the matter.
(c) In the event that a sole arbitrator is not selected
pursuant to paragraph (a) or (b) above and, instead, two arbitrators are
selected pursuant to paragraph (b) above, the two arbitrators will, within 30
days after the appointment of the later of them to be appointed, select an
additional arbitrator who shall act as the sole arbitrator of the dispute. After
selection of such sole arbitrator, the initial arbitrators shall have no further
role with respect to the dispute. In the event that the arbitrators so appointed
do not, within 30 days after the
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appointment of the later of them to be appointed, agree on the selection of the
sole arbitrator, any party involved in such dispute may apply to CPR to select
the sole arbitrator, which selection shall be made by CPR within 30 days after
such application. Any arbitrator selected pursuant to this paragraph (c) shall
be disinterested with respect to any of the parties and the matter and shall be
reasonably competent in the applicable subject matter of the Dispute.
(d) The sole arbitrator selected pursuant to paragraph (a),
(b) or (c) above will set a time for the hearing of the matter which will
commence no later than 90 days after the date of appointment of the sole
arbitrator pursuant to paragraph (a), (b) or (c) above and which hearing will be
no longer than 30 days (unless in the judgment of the arbitrator the matter is
unusually complex and sophisticated and thereby requires a longer time, in which
event such hearing shall be no longer than 90 days). The final decision of such
arbitrator will be rendered in writing to the parties not later than 60 days
after the last hearing date, unless otherwise agreed by the parties in writing.
(e) The place of any arbitration hereunder will be Denver,
Colorado, unless otherwise agreed by the parties.
Section 4.03. HEARINGS. Within the time period specified in Section
4.02(d) of Article IV of this Agreement, the matter shall be presented to the
arbitrator at a hearing by means of written submissions of memoranda and
verified witness statements, filed simultaneously, and responses, if necessary
in the judgment of the arbitrator or both parties. If the arbitrator deems it to
be essential to a fair resolution of the dispute, live cross-examination or
direct examination may be permitted, but is not generally contemplated to be
necessary. The arbitrator shall actively manage the arbitration with a view to
achieving a just, speedy and cost-effective resolution of the Dispute. The
arbitrator may, in his or her discretion, set time and other limits on the
presentation of each party's case, its memoranda or other submissions, and
refuse to receive any proffered evidence, which the arbitrator, in his or her
discretion, finds to be cumulative, unnecessary, irrelevant or of low probative
nature. Except as otherwise set forth herein, any arbitration hereunder will be
conducted in accordance with the CPR Rules for Non-Administered Arbitration of
Business Disputes then prevailing (except that the fee schedule of CPR will not
apply). Except as expressly set forth in Section 4.06 of Article IV of this
Agreement, the decision of the arbitrator will be final and binding on the
parties, and judgment thereon may be had and will be enforceable in any court
having jurisdiction over the parties. Arbitration awards will bear interest at
an annual rate of the Prime Rate per annum from the date of the award. To the
extent that the provisions of this Agreement and the prevailing rules of the CPR
conflict, the provisions of this Agreement shall govern.
Section 4.04. DISCOVERY AND CERTAIN OTHER MATTERS. (a) Any party may
request limited document production from the other party of specific and
expressly relevant documents, with the reasonable expenses of the producing
party incurred in such production paid by the requesting party. Any such
discovery (under which rights to documents shall be substantially less than
document discovery rights prevailing under the Federal Rules of Civil Procedure)
shall be conducted expeditiously and shall not cause the hearing provided for in
Section 4.03 of Article IV of this Agreement to be adjourned except upon consent
of both
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parties or upon an extraordinary showing of cause demonstrating that such
adjournment is necessary to permit discovery essential to a party to the
proceeding. Depositions, interrogatories or other forms of discovery (other than
the document production set forth above) shall be permitted only upon an
extraordinary showing that such discovery is essential to a party to the
proceeding or upon consent of the parties involved in the applicable Dispute.
Disputes concerning the scope of discovery (including document production and
enforcement of the document production requests) will be determined by written
agreement of the parties or, failing such agreement, will be referred to the
arbitrator for resolution. All discovery requests will be subject to the
parties' rights to claim any applicable privilege. The arbitrator will adopt
procedures to protect the proprietary rights of the parties and to maintain the
confidential treatment of the arbitration proceedings (except as may be required
by law). Subject to the foregoing, the arbitrator shall have the power to issue
subpoenas to compel discovery.
(b) The arbitrator shall have full power and authority to
determine issues of arbitrability but shall otherwise be limited to interpreting
or construing the applicable provisions of the Transaction Documents, including
this Agreement, and will have no authority or power to limit, expand, alter,
amend, modify, revoke or suspend any condition or provision of any of the
Transaction Documents, including this Agreement; it being understood, however,
that the arbitrator will have full authority to implement the provisions of, and
to fashion appropriate remedies for breaches of, the Transaction Documents
including this Agreement (including interim or permanent injunctive relief);
provided that the arbitrator shall not have: (i) any authority in excess of the
authority a court having jurisdiction over the parties and the Dispute would
have absent these arbitration provisions; or, (ii) any right or power to award
punitive, treble or consequential damages except to the extent that any of such
damages are actually paid by a party or a member of a party's Group to a Person.
It is the intention of the parties that in rendering a decision the arbitrator
give effect to the applicable provisions of the Transaction Documents including
this Agreement, and the laws of the State of Ohio without regard to the
principles of conflicts of law thereof (it being understood and agreed that this
sentence shall not give rise to a right of judicial review of the arbitrator's
award).
(c) If a party fails or refuses to appear at and participate
in an arbitration hearing after due notice, the arbitrator may hear and
determine the controversy upon evidence produced by the appearing party.
(d) Arbitration costs will be borne equally by each party,
except that each party will be responsible for its own attorney's fees and its
other costs and expenses, including the costs of witnesses selected by such
party and all internal costs.
Section 4.05. CERTAIN ADDITIONAL MATTERS. (a) Any arbitration award
shall be a bare award limited to a holding for or against a party and shall be
without findings as to facts, issues or conclusions of law (including awards
with respect to any matters relating to the validity or infringement of patents
or patent applications) and shall be without a statement of the reasoning on
which the award rests, but must be in adequate form so that a judgment of a
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court may be entered thereupon. Judgment upon any arbitration award hereunder
may be entered in any court having jurisdiction thereof.
(b) Prior to the time at which an arbitrator is appointed
pursuant to Section 4.02 of Section IV of this Agreement, any party may seek one
or more temporary restraining orders in a court of competent jurisdiction if
necessary in order to preserve and protect the status quo. Neither the request
for, or grant or denial of, any such temporary restraining order shall be deemed
a waiver of the obligation to arbitrate as set forth herein and the arbitrator
may dissolve, continue or modify any such order. Any such temporary restraining
order shall remain in effect until the first to occur of the expiration of the
order in accordance with its terms or the dissolution thereof by the arbitrator.
(c) In the event that at any time the sole arbitrator shall
fail to serve as an arbitrator for any reason, the parties shall select a new
arbitrator who shall be disinterested as to the parties and the matter in
accordance with the procedures set forth herein for the selection of the initial
arbitrator. The extent, if any, to which testimony previously given shall be
repeated or as to which the replacement arbitrator elects to rely on the
stenographic record (if there is one) of such testimony shall be determined by
the replacement arbitrator.
Section 4.06. LIMITED COURT ACTIONS. (a) Notwithstanding anything
herein to the contrary, in the event that any party reasonably determines the
amount in controversy in any Dispute (or series of related Disputes) is, or is
reasonably likely to be, in excess of $100 million and if such party desires to
commence a lawsuit in lieu of complying with the arbitration provisions of this
Article IV, such party shall so state in its Demand or by notice given to the
other parties within 20 days after receipt of a Demand with respect thereto. If
the other party to the arbitration does not agree that the amount in controversy
in such Dispute (or series of related Disputes) is, or is reasonably likely to
be, in excess of $100 million, the arbitrator selected pursuant to Section 4.02
hereof shall decide whether the amount in controversy in such Dispute (or series
of related Disputes) is, or is reasonably likely to be, in excess of $100
million. The arbitrator shall set a date that is no later than ten days after
the date of his or her appointment for submissions by the parties with respect
to such issue. There shall not be any discovery in connection with such issue.
The arbitrator shall render his or her decision on such issue within five days
of such date so set to the arbitrator. In the event that the arbitrator
determines that the amount in controversy in such Dispute (or such series of
related Disputes) is, or is reasonably likely to be, in excess of $100 million,
the provisions of Sections 4.01, 4.02, 4.03, 4.04, and 4.05 of Article IV of
this Agreement shall not apply, and on or before (but, except as expressly set
forth in Section 4.06(b), not after) the tenth business day after the date of
such decision, either party to the arbitration may elect, in lieu of
arbitration, to commence a lawsuit with respect to such Dispute in any court of
competent jurisdiction. If the arbitrator does not so determine, the provisions
of this Article IV (including with respect to time periods) shall apply as if no
determinations were sought or made pursuant to this Section 4.06(a).
(b) In the event that an arbitration award in excess of $100
million is issued in any arbitration proceeding commenced hereunder, any party
may, within 60 days after the date
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of such award, submit the Dispute giving rise thereto to a court of competent
jurisdiction, regardless of whether such party or any other party sought to
commence lawsuit in lieu of proceeding with arbitration in accordance with
Section 4.06(a) of Article IV of this Agreement. In such event, the applicable
court may elect to rely on the record developed in the arbitration or, if it
determines that it would be advisable in connection with the matter, allow the
parties to seek additional discovery or to present additional evidence. Each
party shall be entitled to present arguments to the court with respect to
whether any such additional discovery or evidence shall be permitted and with
respect to all other matters relating to the Dispute.
(c) No party shall raise as a defense the statute of
limitations if the applicable Demand was delivered on or prior to the Applicable
Deadline and, if applicable, if the matter is submitted to a court of competent
jurisdiction within the 60-day period specified in Section 4.06(b) of Article IV
of this Agreement.
Section 4.07. CONTINUITY OF SERVICE AND PERFORMANCE. Unless otherwise
agreed in writing, the parties will continue to provide service and honor all
other commitments under the Transaction Documents during the course of
arbitration pursuant to the provisions of this Article IV with respect to all
matters not subject to such Dispute.
ARTICLE V
MISCELLANEOUS
Section 5.01. COMPLETE AGREEMENT; CONSTRUCTION. This Agreement and the
Transaction Documents and other agreements and documents referred to therein,
shall constitute the entire agreement between the parties with respect to the
subject matter hereof and shall supersede all previous negotiations, commitments
and writings with respect to such subject matter.
Section 5.02. SURVIVAL OF AGREEMENTS. All covenants and agreements of
the parties contained in this Agreement shall survive the Distribution Date.
Section 5.03. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Ohio without regard to the
principles of conflicts of law thereof.
Section 5.04. NOTICE. All notices and other communications required or
permitted to be given or made under this Agreement shall, unless otherwise
provided herein, be in writing and shall be deemed to have been given: (i) on
the date of personal delivery; or, (ii) provided such notice or communication is
actually received by the party to which it is addressed in the ordinary course
of delivery, on the date of (A) deposit in the United States mail, postage
prepaid, by registered or certified mail, return receipt requested, (B)
transmission by telegram, cable, telex or facsimile transmission, or (C)
delivery to a nationally-recognized overnight courier service, in each case
addressed as set forth below, or to such other person, entity or address as
either party shall designate by notice to the other in accordance herewith:
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To GenCorp: GenCorp Inc.
Xxxxxxx 00 & Xxxxxxx Xxxx
Xxxxxx Xxxxxxx, XX 00000
Attention: General Counsel
To OMNOVA: Omnova Solutions Inc.
000 Xxxxx Xxxx
Xxxxxxxx, Xxxx 00000-0000
Attention: General Counsel
Section 5.05. WAIVER. No waiver by any party of any of the provisions
of this Agreement will be deemed, or will constitute, a waiver of any other
provision, whether similar, not will any waiver constitute a continuing waiver.
No waiver will be binding unless executed in writing by the party making the
waiver.
Section 5.06. ASSIGNMENT. Neither party may assign, by operation of
law, merger or otherwise, license, sublicense or otherwise transfer any or all
of its rights or obligations under this Agreement to any other person or entity
without obtaining the prior written consent of the other party.
Section 5.07. AMENDMENTS. This Agreement may not be modified or amended
except by an agreement in writing signed by the parties.
Section 5.08. SUCCESSORS AND ASSIGNS. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
and their respective successors and permitted assigns.
Section 5.09. SUBSIDIARIES. Each of the parties hereto shall cause to
be performed, and hereby guarantees the performance of, all actions, agreements,
and obligations set forth herein or arising hereunder to be performed by any
member of such parties' Group on and after the Distribution Date.
Section 5.10. NO THIRD PARTY BENEFICIARIES. This Agreement is solely
for the benefit of the parties hereto and their respective Group members and
shall not be deemed to confer upon third parties any remedy, claim, right or
reimbursement or other right.
Section 5.11. TITLES AND HEADINGS. Titles and headings to articles and
sections herein are inserted for the convenience of reference only and are not
intended to be a part of or to affect the meaning or interpretation of this
Agreement.
Section 5.12. CONFIDENTIALITY. Except as required by law, the parties
shall hold, and shall cause their respective officers, directors, employees,
agents and other representatives to hold, the existence, content and result of
any escalation, mediation or arbitration in confidence in accordance with the
requirements of the Transaction Documents, except as may be required
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in order to enforce any award. Each of the parties shall request that any
mediator or arbitrator comply with such confidentiality requirement.
Section 5.13. SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. Without prejudice to any
rights or remedies otherwise available to any party hereto, each party
acknowledges that damages would be an inadequate remedy for any breach of the
provisions of this Agreement and agrees that the obligations of the parties
hereunder shall be specifically enforceable.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
GENCORP INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
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Title: Senior Vice President
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OMNOVA SOLUTIONS INC.
By: /s/ Xxxxx X. XxXxx
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Name: Xxxxx X. XxXxx
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Title: Senior Vice President
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