Exhibit 2.1
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ASSET PURCHASE AGREEMENT
DATED AS OF AUGUST 2, 2002
BY AND AMONG
ROHM AND XXXX COMPANY
ON ONE HAND
AND
FERRO CORPORATION,
FERRO SPAIN S.A.,
FERRO (GREAT BRITAIN) LTD.,
RUHR-PULVERLACK GMBH,
AND
XXXXX-XXXX-XXXXXX NORDISKA AB
ON THE OTHER HAND
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TABLE OF CONTENTS
PAGE
PREAMBLE ............................................................................................... 1
RECITALS ............................................................................................... 1
TERMS AND CONDITIONS ................................................................................... 2
ARTICLE 1 - GENERAL PROVISIONS ................................................................ 2
1.1 Definitions ................................................................. 2
1.2 Construction ................................................................ 2
1.3 RandH Guarantee ............................................................. 2
ARTICLE 2 - PURCHASE AND SALE ................................................................. 3
2.1 Transaction ................................................................ 3
2.2 Acquired Assets ............................................................. 3
2.3 Retained Assets ............................................................. 4
2.4 Assumed Liabilities ......................................................... 4
2.5 Retained Liabilities ........................................................ 5
2.6 Purchase Price .............................................................. 6
2.7 Adjustment .................................................................. 6
(A) Preliminary Working Capital Statement ................................. 6
(B) Review by Ferro ....................................................... 6
(1) Acceptance by Ferro ............................................ 6
(2) Dispute by Ferro ............................................... 7
(C) Informal Negotiations ................................................. 7
(D) Dispute Resolution..................................................... 7
(E) Base-Line Working Capital ............................................. 7
(F) Closing Working Capital ............................................... 7
(G) Amount of Adjustment .................................................. 7
2.8 Payment of Purchase Price ................................................... 8
(A) Payment at Closing .................................................... 8
(B) Final Payment ......................................................... 8
2.9 Refund of Adjustment ........................................................ 8
2.10 Method of Payment ........................................................... 8
(A) Directed Payments ..................................................... 8
(B) Other Payments ........................................................ 8
2.11 Allocation of Consideration ................................................. 8
2.12 Value Added Taxes ........................................................... 8
ARTICLE 3 - ACTIONS BEFORE CLOSING ............................................................ 9
3.1 Access to Records and Employees ............................................. 9
3.2 Interim Conduct of the Powder Coatings Business ............................. 9
3.3 The RandH Buyers' Approval of Certain Transactions .......................... 9
3.4 Shared Intellectual Property ................................................ 11
3.5 Consents .................................................................... 11
3.6 Coordination of Public Announcements ........................................ 12
3.7 Consultation with Employee Representatives .................................. 12
3.8 Regulatory Approvals ........................................................ 13
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ARTICLE 4 - CONDITIONS ....................................................................... 13
4.1 Conditions to the RandH Buyers' Obligations ................................. 13
4.2 Conditions to the Ferro Sellers' Obligations ................................ 15
4.3 Parties' Best Efforts ....................................................... 16
ARTICLE 5 - CLOSING ........................................................................... 16
5.1 The Closing ................................................................. 16
5.2 Date, Time, and Place of Closing ............................................ 16
5.3 The RandH Buyers' Obligations ............................................... 16
5.4 The Ferro Sellers' Obligations .............................................. 17
5.5 Local Formalities ........................................................... 17
ARTICLE 6 - ACTIONS AFTER CLOSING ............................................................. 18
6.1 Further Conveyances ......................................................... 18
6.2 Further Consents ............................................................ 18
6.3 Accounting Reports .......................................................... 19
6.4 Noncompetition .............................................................. 19
6.5 Use of Ferro Name and Xxxx .................................................. 20
6.6 Access to Former Business Records ........................................... 20
6.7 Access to Former Employees .................................................. 21
6.8 Termination of Insurance Coverage ........................................... 21
6.9 Removal of Retained Assets .................................................. 21
6.10 Change of Corporate Name .................................................... 21
ARTICLE 7 - REPRESENTATIONS AND WARRANTIES..................................................... 22
7.1 The Ferro Sellers' General Representations and Warranties ................... 22
(A) Organization and Existence ............................................ 22
(B) Power and Authority ................................................... 22
(C) Authorization ......................................................... 22
(D) Binding Effect ........................................................ 22
(E) No Default ............................................................ 22
(F) Finders ............................................................... 23
7.2 The Ferro Sellers' Representations and Warranties
Concerning the Powder Coatings Disclosure Package ........................... 23
(A) Organization .......................................................... 23
(B) Financial Statements .................................................. 23
(C) Inventories ........................................................... 23
(D) Trade Accounts Receivable ............................................. 23
(E) Trade Accounts Payable ................................................ 24
(F) Real Property ......................................................... 24
(G) Tangible Personal Property ............................................ 24
(H) Intellectual Property ................................................. 24
(I) Indebtedness .......................................................... 25
(J) Litigation ............................................................ 25
(K) Contracts ............................................................. 25
(L) Employees and Employee Benefits ....................................... 25
(M) Compliance with Environmental Laws ................................... 26
(N) Compliance with Health and Safety Laws ................................ 26
(O) Compliance with Other Laws ............................................ 26
(P) Taxes ................................................................. 26
(Q) Insurance ............................................................. 27
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(R) Customers ............................................................. 27
(S) No Material Events .................................................... 27
7.3 RandH's Representations and Warranties ...................................... 27
(A) Organization and Existence ............................................ 27
(B) Power and Authority ................................................... 27
(C) Authorization ......................................................... 28
(D) Binding Effect ........................................................ 28
(E) No Default ............................................................ 28
(F) Finders ............................................................... 28
7.4 Meaning of the "Ferro Sellers' Knowledge" ................................... 28
7.5 Disclaimer .................................................................. 28
ARTICLE 8 - SPECIFIC OBLIGATIONS .............................................................. 29
8.1 Employee Obligations ........................................................ 29
(A) Employees ............................................................. 29
(B) Transfer of Transferred Employees...................................... 29
(C) The Ferro Sellers' Employee Obligations ............................... 29
(D) The RandH Buyers' Employee Obligations ............................... 30
(E) Computation of Transferred Obligations ................................ 31
(1) Generally .................................................... 31
(2) Transferred Obligations ...................................... 31
(3) Non-Lump Sum Obligations ..................................... 31
(4) German and Spanish Pension Obligations ....................... 32
(5) Benefit Plan Carriers ........................................ 33
(6) Plan Continuations ........................................... 33
(F) Non-Interference ...................................................... 33
(H) German Geschaftsfuhrer ................................................ 33
8.2 Environmental Obligations ................................................... 35
(A) Pre-Closing Environmental Matters...................................... 35
(B) The RandH Buyers' Operations After Closing............................. 35
(C) Remediation ........................................................... 36
(D) Spanish Permits ....................................................... 37
8.3 Health and Safety Obligations ............................................... 37
(A) Notice to the Ferro Sellers ........................................... 37
(B) Joint Investigation ................................................... 37
(C) Parties' Responsibilities ............................................. 38
8.4 Product Warranty Obligations ................................................ 39
(A) Product Warranty Claims ............................................... 39
(B) Processing of Product Warranty Claims ................................. 39
(C) Notice of Proposed Settlement ......................................... 39
(D) Disputes .............................................................. 39
(E) Parties' Responsibilities ............................................. 40
8.5 The RandH Buyers' Sole Remedy ............................................... 40
ARTICLE 9 - INDEMNIFICATION ................................................................... 41
9.1 Indemnification of the Ferro Sellers ........................................ 41
9.2 Indemnification of the RandH Buyers ......................................... 41
9.3 Claims ...................................................................... 41
(A) Notice ................................................................ 42
(B) Responsibility for Defense ............................................ 42
(C) Right to Participate .................................................. 42
(D) Settlement ............................................................ 42
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9.4 Disputed Responsibility ..................................................... 43
9.5 Quantum Limitation on Indemnification ....................................... 43
9.6 Time Limitation on Indemnification .......................................... 44
9.7 Actual Amount ............................................................... 44
9.8 Exclusive Remedies .......................................................... 45
9.9 Indemnity Payments as Adjustments ........................................... 45
ARTICLE 10 - DISPUTE RESOLUTION .............................................................. 45
10.1 Dispute Notice .............................................................. 45
10.2 Informal Negotiations ....................................................... 45
10.3 Dispute Resolution Proceedings .............................................. 45
(A) Designation of Representatives ..................................... 45
(B) Selection of Neutral ............................................... 45
(C) Procedures and Process ............................................. 46
(D) Decision ........................................................... 46
10.4 Equitable Relief ............................................................ 46
10.5 Binding Effect .............................................................. 46
ARTICLE 11 - AMENDMENT, WAIVER, AND TERMINATION................................................ 47
11.1 Amendment ................................................................... 47
11.2 Waiver....................................................................... 47
11.3 Termination ................................................................. 47
ARTICLE 12 - MISCELLANEOUS .................................................................... 47
12.1 Cooperation ................................................................. 47
12.2 Severability ................................................................ 47
12.3 Costs and Expenses .......................................................... 47
12.4 Notices ..................................................................... 48
12.5 Assignment and Appointment .................................................. 48
12.6 No Third Parties ............................................................ 48
12.7 Incorporation by Reference .................................................. 48
12.8 Governing Law ............................................................... 48
12.9 Bulk Sales .................................................................. 49
12.10 Counterparts ................................................................ 49
12.11 Complete Agreement .......................................................... 49
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APPENDICES
Appendix A - Definitions
Appendix B - Retained Assets
Appendix C - Retained Liabilities
Appendix D - Form of Preliminary Working Capital Statement
Appendix E - Accounting Principles
Appendix F - Allocation of Consideration
Appendix G - Xxxxxxxx Lease
Appendix H - Xxxxxxxx Services Agreement
Appendix I - Xxxxxxxxx Lease
Appendix J - Xxxxxxxxx Services Agreement
Appendix K - VAMP License
Appendix L - Documents to Be Delivered by the Ferro Sellers at the Closing
Appendix M - Documents to Be Delivered by the RandH Buyers at the Closing
Appendix N - Contents of the Powder Coatings Disclosure Package
Appendix O - Due Diligence Certifications
Appendix P - Employees
Appendix Q - Actuarial Assumptions
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (this "Purchase Agreement") is dated as of
August 2, 2002, and is by and among:
ROHM AND XXXX COMPANY ("RandH"), a Delaware corporation, on one
hand;
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FERRO CORPORATION ("Ferro"), an Ohio corporation, FERRO SPAIN S.A.
("Ferro Spain"), a Spanish corporation (sociedad anonima), FERRO (GREAT
BRITAIN) LTD. ("Ferro UK"), a private limited company organized under the
laws of England and Wales, RUHR-PULVERLACK GMBH ("RPL Germany"), a German
limited liability company, and XXXXX-XXXX-XXXXXX NORDISKA AB ("RP
Sweden"), a Swedish company limited by shares (Aktiebolag) (collectively,
the "Ferro Sellers"), on the other hand.
RECITALS
A. The Ferro Sellers are engaged in the business (the "Powder Coatings
Business") of researching, designing, developing, formulating,
manufacturing, and selling thermosetting-formulated powder coatings (the
"Products") for a variety of decorative and protective end-use
applications in the appliance, automotive, general industrial and other
industries in and from Europe, including Products produced and
manufactured in Europe and exported to other regions. (The term "Powder
Coatings Business" does not, however, include the powder coatings business
conducted by Ferro and its Affiliates in North and South America or in the
Asia/Pacific region.)
X. Xxxx and Xxxx (UK) Limited ("RandH UK") is a private limited company
organized under the laws of England and Wales; Rohm and Xxxx Espana, S.A.
("RandH Spain") is a Spanish corporation (sociedad anonima); Rohm and Xxxx
Deutschland GmbH ("RandH Germany") is a German limited liability company
(Gesellschaft mit beschrankter Haftung); and Rohm and Xxxx Denmark Finance
A/S ("RandH Denmark") is a Danish joint stock company (Aktieselskab).
C. RandH UK, RandH Spain, RandH Germany, and RandH Denmark are each
wholly-owned subsidiaries of RandH. (RandH, RandH UK, RandH Spain, RandH
Germany, and RandH Denmark are hereinafter referred to collectively as the
"RandH Buyers.")
D. The RandH Buyers desire to purchase from the Ferro Sellers, and the Ferro
Sellers desire to sell to the RandH Buyers, the Powder Coatings Business
on and subject to the terms and conditions of this Purchase Agreement.
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TERMS AND CONDITIONS
In consideration of the matters recited above and of other good and valuable
consideration, and intending to be legally bound by this Purchase Agreement, the
RandH Buyers and the Ferro Sellers hereby agree as follows:
ARTICLE 1- GENERAL PROVISIONS
1.1 DEFINITIONS. Appendix A sets forth the definitions of certain terms used
in this Purchase Agreement. Those terms shall have the meanings set forth
on Appendix A where used in this Purchase Agreement and identified with
initial capital letters.
1.2 CONSTRUCTION. For purposes of this Purchase Agreement, except where the
context otherwise requires --
(A) The term "parties" means the RandH Buyers and the Ferro Sellers.
(B) The term "person" includes any natural person, firm, association,
partnership, corporation, limited liability company, limited
liability partnership, governmental agency or other entity. The term
"third-party" means any person other than the parties and their
Affiliates.
(C) The term "today" means August 2, 2002.
(D) All currency amounts stated in this Purchase Agreement are in United
States Dollars. (Other currency amounts will translate into United
States Dollars amounts at the spot exchange rate or rates as
published in the Financial Times on the business day immediately
preceding the date as of which translation is to occur.)
(E) References to "days" mean calendar days. (If, however, an action or
obligation is due to be undertaken by or on a day other than a
business day, i.e., a Saturday, Sunday, or public holiday, in the
United States, then that action or obligation will be deemed to be
due on the next following business day.)
(F) When introducing a series of items, the term "including" is not
intended to limit the more general description that precedes the
items listed.
(G) The Table of Contents and the headings of the Articles and Sections
are included for convenience of reference only and are not intended
to affect the meaning of the operative provisions to which they
relate.
1.3 RANDH GUARANTEE. RandH hereby unconditionally and irrevocably covenants
and guarantees to the Ferro Sellers the full and seasonable performance by
RandH UK, RandH Spain, RandH Germany, and RandH Denmark, both as to
payment and performance, of each and every obligation of RandH UK, RandH
Spain, RandH Germany, and RandH Denmark as RandH Buyers under this
Purchase Agreement with exactly the same force and effect as if RandH UK,
RandH Spain, RandH Germany, and RandH Denmark had executed and delivered
this Purchase Agreement. The Ferro Sellers will not be required to resort
to or to exhaust its remedies against RandH UK, RandH Spain, RandH
Germany, and RandH Denmark before calling upon RandH to pay
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and/or perform the foregoing guarantee and such guarantee will be a
continuing guarantee and the liability of RandH hereunder will not be
affected by or diminished in any way by reason of any agreement or any
amendment of agreement by any other RandH Buyer and the Ferro Sellers or
by any extension of time or other waiver that may be granted by the Ferro
Sellers. The foregoing guarantee will not be terminated, affected, or
diminished in any manner by the seeking of relief, or the adjudication of
any such other RandH Buyer as a bankrupt, under any bankruptcy,
insolvency, or similar law relating to creditors' rights or debtors'
relief.
ARTICLE 2 - PURCHASE AND SALE
2.1 TRANSACTION. On and subject to the terms and conditions of this Purchase
Agreement,
(A) At the Closing, the RandH Buyers will purchase from the Ferro
Sellers, and the Ferro Sellers will sell, transfer, and assign to
the RandH Buyers, all of the Acquired Assets (as defined in Section
2.2);
(B) At the Closing, the RandH Buyers will assume and become directly and
solely responsible for the payment or discharge when due of all of
the Assumed Liabilities (as defined in Section 2.4);
(C) The RandH Buyers will pay the Ferro Sellers the Purchase Price as
provided in Section 2.8.
Notwithstanding such transaction, the Ferro Sellers will retain the
Retained Assets (as defined in Section 2.3) and the Retained Liabilities
(as defined in Section 2.5).
2.2 ACQUIRED ASSETS. For purposes of this Purchase Agreement, the term
"Acquired Assets" means all of the Ferro Sellers' rights, title, and
interest in and to, as the same shall exist as of the Closing:
(A) All Trade Accounts Receivable;
(B) All Inventories;
(C) All Prepaid Items;
(D) All Tangible Personal Property (other than automobiles of the Powder
Coatings Business being used by Excluded Employees);
(E) All of the Acquired Intellectual Property;
(F) The unrestricted right to use the Shared Intellectual Property to
the extent physically located at a Facility;
(G) The benefits (so far as they can be or are lawfully assigned,
transferred to, or held in trust for the RandH Buyers) of all
Contracts, Leases, Licenses, and Permits;
(H) All Third-Party Claims related to any of the Acquired Assets or any
of the Assumed Liabilities;
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(I) All assets supporting the Employee Benefit Arrangements being
assumed by RandH under Article 8; and
(J) All Business Records.
2.3 RETAINED ASSETS. For purposes of this Purchase Agreement, the term
"Retained Assets" means all assets other than the Acquired Assets,
including the following rights, properties, and assets as the same shall
exist as of the Closing:
(A) All Cash;
(B) All Real Property;
(C) All of the Retained Intellectual Property;
(D) All trademarks used by the Ferro Sellers (or any of them), whether
or not registered, that incorporate the names and trademarks "Ferro"
and "Check-in-a-Circle" logo and the goodwill associated with such
names, marks, and logos;
(E) The Shared Intellectual Property to the extent not physically
located at a Facility;
(F) All Third-Party Claims that relate to any of the Retained Assets or
any of the Retained Liabilities;
(G) All policies of insurance and claims and rights under such policies
of insurance, whether or not related to the Powder Coatings
Business, the Acquired Assets, or the Assumed Liabilities;
(H) All assets of Employee Benefit Arrangements being retained by the
Ferro Sellers under Article 8; and
(I) All assets, whether or not used by the Ferro Sellers in their
conduct of the Powder Coatings Business, which are identified as
Retained Assets on Appendix B.
2.4 ASSUMED LIABILITIES. For purposes of this Purchase Agreement, the term
"Assumed Liabilities" means the following liabilities and obligations as
the same shall exist as of the Closing:
(A) All Trade Accounts Payable and Other Current Liabilities;
(B) All liabilities and obligations that arise after the Closing under,
or as a direct consequence of the assignment of, the Contracts,
Leases, Licenses, and Permits to the RandH Buyers under this
Purchase Agreement;
(C) The RandH Buyers' Employee Obligations (as defined in Section 8.1);
(D) The RandH Buyers' Environmental Obligations (as defined in Section
8.2);
(E) The RandH Buyers' Health and Safety Obligations (as defined in
Section 8.3);
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(F) The RandH Buyers' Product Warranty Obligations (as defined in
Section 8.4); and
(G) Costs and expenses for which the RandH Buyers are responsible under
Section 12.3.
2.5 RETAINED LIABILITIES. For the purposes of this Purchase Agreement the term
"Retained Liabilities" means all liabilities and obligations of the Powder
Coatings Business that have not been fully discharged or satisfied by the
Ferro Sellers before the Closing, except for the Assumed Liabilities,
including the following liabilities and obligations as the same shall
exist as of the Closing:
(A) All Financial Debt;
(B) All liabilities, undertakings, and obligations incurred by the Ferro
Sellers in connection with the conduct of businesses other than the
Powder Coatings Business, including the powder coatings business
conducted by Ferro and its Affiliates in North and South America and
in the Asia/Pacific region;
(C) All liabilities and obligations (other than those constituting
Product Warranty Claims (as defined in Section 8.4(A) below))
arising out of, relating to, or resulting from any claims or
actions, whether founded upon negligence, breach of warranty, strict
liability in tort, and/or other similar legal theory, seeking
compensation or recovery for injury to third-parties or damage to
property alleged to have been caused by a Product manufactured and
sold by any of the Ferro Sellers before the Closing;
(D) All liabilities and obligations for the payment of Taxes, including
(1) Any Taxes arising as a result of the Ferro Sellers' operation
of the Powder Coatings Business or ownership of the Acquired
Assets before the Closing,
(2) Any Taxes measured on the basis of the Ferro Seller's gain on
the sale of the Acquired Assets pursuant to this Purchase
Agreement, and
(3) Any deferred Taxes of any nature,
in each case except to the extent any such Taxes are reflected in
the Preliminary Working Capital Statement and included in the
Working Capital Adjustment calculated in accordance with Section
2.7;
(E) The Ferro Sellers' Employee Obligations (as defined in Section 8.1);
(F) The Ferro Sellers' Environmental Obligations (as defined in Section
8.2);
(G) The Ferro Sellers' Health and Safety Obligations (as defined in
Section 8.3);
(H) The Ferro Sellers' Product Warranty Obligations (as defined in
Section 8.4);
(I) Costs and expenses for which the Ferro Sellers are responsible under
Section 12.3;
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(J) All liabilities and obligations under or in connection with the
Retained Assets;
(K) Any payment obligation of the Powder Coatings Business arising at or
triggered by the Closing to any shareholders or Affiliate of the
Ferro Sellers, including any liability to distribute to any of the
Ferro Sellers' shareholders or otherwise apply all or any part of
the consideration received under this Agreement; and
(L) All liabilities, undertakings, and obligations, whether or not
arising primarily out of the Ferro Sellers' conduct of the Powder
Coatings Business, which are identified as Retained Liabilities on
Appendix C.
2.6 PURCHASE PRICE. For purposes of this Purchase Agreement, the term
"Purchase Price" means $60,000,000 plus or minus the amount of the
Adjustment (and, if applicable, any further adjustment(s) pursuant to
Section 9.9).
2.7 ADJUSTMENT. The Adjustment will be determined as follows:
(A) PRELIMINARY WORKING CAPITAL STATEMENT. Immediately after the
Closing, the RandH Buyers will cause management of the Powder
Coatings Business to prepare a statement (the "Preliminary Working
Capital Statement") of the Working Capital of the Powder Coatings
Business at and as of the Closing, substantially in the form set
forth on Appendix D. The Preliminary Working Capital Statement shall
be prepared in accordance with the accounting principles (the
"Accounting Principles") set forth on Appendix E. The RandH Buyers
will deliver the Preliminary Working Capital Statement to Ferro
within 90 days after the Closing.
(B) REVIEW BY FERRO. Following receipt of the Preliminary Working
Capital Statement, Ferro will be afforded a period of 60 days in
which to review such statement. At or before the end of that period,
Ferro will either --
(1) ACCEPTANCE BY FERRO. Accept the Preliminary Working Capital
Statement in its entirety, in which case the Working Capital
of the Powder Coatings Business at and as of the Closing will
be deemed to be as set forth on the Preliminary Working
Capital Statement, or
(2) DISPUTE BY FERRO. Deliver to the RandH Buyers written notice
and a detailed written explanation of those items in
Preliminary Working Capital Statement which Ferro disputes,
together with payment of the amount (if any) of the Adjustment
not in dispute, in which case the items of Working Capital not
affected by the dispute will be deemed to be as set forth on
the Preliminary Working Capital Statement and the items
identified by Ferro shall be deemed to be in dispute.
If Ferro fails to provide the written notice as and when provided in
Section 2.7(B)(2) above, then Ferro will be deemed to have accepted
the Preliminary Working Capital Statement as provided in Section
2.7(B)(1) above.
(C) INFORMAL NEGOTIATIONS. If Ferro delivers a notice under Section
2.7(B)(2), then during the 30-day period following the delivery of
such notice, the parties will
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cause their representatives to meet and seek to resolve the disputed
items cordially through informal negotiations.
(D) DISPUTE RESOLUTION. If representatives of the parties are unable to
resolve disputed items through the informal negotiations described
in Section 2.7(C), then at the end of the 30-day period described in
Section 2.7(C) the parties will refer the unresolved disputed items
for final binding resolution to a mutually agreed
internationally-recognized firm of independent certified public
accountants. The parties will request such firm to review and
resolve the disputed items in accordance with the Accounting
Principles within 30 days of such reference. The resolution of the
disputed items by such independent accounting firm will be binding
on the Ferro Sellers and the RandH Buyers, will be neither
appealable nor contestable by the Ferro Sellers or the RandH Buyers,
and will not be subject to collateral attack by the Ferro Sellers or
the RandH Buyers for any reason.
(E) BASE-LINE WORKING CAPITAL. The "Base-Line Working Capital" will be
an amount equal to $12,000,000.
(F) CLOSING WORKING CAPITAL. The "Closing Working Capital" will be an
amount equal to the Working Capital of the Powder Coatings Business
at and as of the Closing as determined under Sections 2.7(A)-(D)
above.
(G) AMOUNT OF ADJUSTMENT. If the Closing Working Capital is -
(1) Less than $12,000,000, then the Adjustment will be a negative
amount equal to the amount by which the Closing Working
Capital is less than the Base-Line Working Capital;
(2) More than $12,000,000, then the Adjustment will be a positive
amount equal to the amount by which the Closing Working
Capital is greater than the Base-Line Working Capital; or
(3) Equal to $12,000,000, then the Adjustment will be zero.
The Purchase Price will finally be determined on the date the amount
of the Adjustment is finally determined.
2.8 PAYMENT OF PURCHASE PRICE. The RandH Buyers will pay the Purchase Price as
follows:
(A) PAYMENT AT CLOSING. At the Closing, the RandH Buyers will pay Ferro
(for itself and as agent for the other Ferro Sellers) the total sum
of $60,000,000; and
(B) FINAL PAYMENT. If the Adjustment is a positive amount, the RandH
Buyers will, within 10 business days after the final determination
of the Purchase Price, pay Ferro (for itself and as agent for the
other Ferro Sellers) the amount of the Adjustment, together with
interest thereon at the Prescribed Rate for the period from the
Closing Date through and including the date on which the Adjustment
is paid, within 10 business days after the final determination of
the Purchase Price.
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(Payments of further adjustments pursuant to Section 9.9 will be made as
provided in Section Article 9.)
2.9 REFUND OF ADJUSTMENT. If the Adjustment is a negative amount, then the
Ferro Sellers will, within 10 business days after the final determination
of the Purchase Price, refund to the RandH Buyers the amount of the
Adjustment, less any amounts previously paid by the Ferro Sellers in
respect of the Adjustment pursuant to Section 2.7, together with interest
thereon at the Prescribed Rate for the period from the Closing Date
through and including the date on which the Adjustment is paid.
2.10 METHOD OF PAYMENT. All payments under this Purchase Agreement shall be
made by delivery to the payee as follows:
(A) DIRECTED PAYMENTS. If a party which is entitled to a payment under
this Purchase Agreement provides the other party five days' advance
written designation of a bank and account number into which the
payee wishes payment to be made, then the payer will make such
payment by wire transfer (in immediately available funds) to the
designated account of the payee.
(B) OTHER PAYMENTS. In all other cases, the party obligated to make a
payment under this Purchase Agreement will do so by delivering to
the payee a bank cashier's check (in immediately available funds)
payable to the order of the payee.
2.11 ALLOCATION OF CONSIDERATION. The total consideration paid by the RandH
Buyers to purchase the Powder Coatings Business from the Ferro Sellers is
the sum of the Purchase Price plus the book amount of the Assumed
Liabilities as at the Closing, which consideration will be allocated among
the Acquired Assets as set forth on Appendix F.
2.12 VALUE ADDED TAXES. The Purchase Price paid by the RandH Buyers will be
exclusive of any value added taxes. The parties will use their best
efforts to ensure, to the extent possible, that the transfer of the Powder
Coatings Business in accordance with any local transfer agreement is
treated as a transfer of a business as a going concern for the purposes of
any applicable value added tax legislation or otherwise fall within
another applicable exemption from value added taxes.
ARTICLE 3 - ACTIONS BEFORE CLOSING
3.1 ACCESS TO RECORDS AND EMPLOYEES. From today until the Closing, the Ferro
Sellers will cause the Powder Coatings Business to afford duly authorized
representatives of the RandH Buyers free and full access during normal
business hours to all of the assets, properties, books, records, and
employees of the Powder Coatings Business and will permit such
representatives to make abstracts from, or take copies of, such books,
records, or other documentation, or to obtain temporary possession of any
thereof as may be reasonably required by the RandH Buyers. During such
period, the Ferro Sellers will furnish to the RandH Buyers such
information concerning the Powder Coatings Business, and its assets,
liabilities, or condition as the RandH Buyers may request. Notwithstanding
the foregoing, however, the Ferro Sellers will not be obligated to
disclose or make available to the RandH Buyers any information concerning
the Powder Coatings Business that, in the reasonable opinion of Ferro's
counsel, should not be disclosed to the RandH Buyers as a matter of law.
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3.2 INTERIM CONDUCT OF THE POWDER COATINGS BUSINESS. From today until the
Closing, the Ferro Sellers will conduct the Powder Coatings Business only
in the ordinary and usual course, subject to the RandH Buyers' approval of
certain transactions pursuant to Section 3.3. Without limiting the
generality of the foregoing, insofar as the Powder Coatings Business is
concerned, the Ferro Sellers will use their reasonable efforts to:
(A) Preserve substantially intact the Powder Coatings Business'
relationships and goodwill with suppliers, customers, employees,
creditors, and others having business dealings with the Powder
Coatings Business;
(B) Maintain in full force and effect its existing policies of
insurance, that materially affect the Powder Coatings Business;
(C) Continue to perform, in all material respects, their obligations
under all contracts, commitments, or other obligations to be
included as part of the Acquired Assets;
(D) Comply in all material respects with all legal requirements
applicable to the operations of the Powder Coatings Business;
(E) Maintain in full force and effect, without amendment, all Material
Contracts; and
(F) Continue to make, as planned, all pre-planned capital expenditures,
and maintain the Acquired Assets in a state of repair and condition
consistent with the ordinary course conduct of the Powder Coatings
Business.
3.3 THE RANDH BUYERS' APPROVAL OF CERTAIN TRANSACTIONS. Except as may
otherwise be required under this Purchase Agreement, from today until the
Closing, insofar as the Powder Coatings Business is concerned, the Ferro
Sellers will not do any of the following without the prior approval with
written confirmation of the RandH Buyers, which approval shall not be
unreasonably withheld:
(A) Incur or permit the incurrence of any Financial Debt;
(B) Purchase or dispose of any Real Property or interests in Real
Property;
(C) Enter into any Lease involving a term of more than one year or
rental obligation exceeding $100,000 per annum in any single case;
(D) Voluntarily permit to be incurred any Encumbrances on assets of the
Powder Coatings Business except in the ordinary course of business;
(E) Except for normal merit or cost-of-living increases in accordance
with the Ferro Sellers' past practices, increase the rate of
compensation for any of the employees of the Powder Coatings
Business or otherwise enter into or alter any employment,
consulting, or managerial services agreement primarily affecting the
Powder Coatings Business;
(F) Commence, enter into, or alter any Employee Benefit Arrangement
affecting Employees of the Powder Coatings Business or otherwise
commit to any payment to an employee that becomes due and payable as
a result of the consummation of this transaction;
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(G) Add Employees to the Powder Coatings Business who would transfer
with the business upon its sale;
(H) Enter into, terminate or alter any existing contract of employment
with any Employee (other than an Excluded Employee) or materially
alter any Employee's duties or dismiss any Employee other than for
disciplinary reasons outside the ordinary and usual course of
business;
(I) Make any single new commitment or increase any single previous
commitment for capital expenditures for the Powder Coatings Business
in an amount exceeding $100,000 in any individual case or $500,000
in the aggregate;
(J) Accelerate or delay the sale of Products except as may be necessary
in the ordinary course of business;
(K) Make any material change in the credit policies or warranty terms
extended to new or existing customers by the Powder Coatings
Business;
(L) Waive, cancel or compromise any material right or claim of the Ferro
Sellers in respect of the Powder Coatings Business or modify, amend,
cancel or terminate any Material Contract; or
(M) Sell, assign, transfer, license, or convey any of the Intellectual
Property to be included as part of the Acquired Assets.
3.4 SHARED INTELLECTUAL PROPERTY. Between today and the Closing,
(A) The Ferro Sellers will convene a meeting among Detlev Brand, Xxxxxx
Xxxxx and one other Employee (to be designated by the RandH Buyers)
of the Powder Coatings Business and Xxx Xxxxxxx, Xxxxx Xxxxxx and
Xxxxx Xxxxx of Ferro's North American powder coatings operations.
The purpose of such meeting will be to allow all such employees a
full and free opportunity to discuss and educate themselves
regarding the current status and development of the Ferro research
and development projects related to Shared Intellectual Property in
regions other than their own.
(B) The Ferro Sellers will assemble a copy of all materials currently
located outside the Facilities that either Detlev Brand and/or
Xxxxxx Xxxxx and/or the Employee designated by the RandH Buyers
believe are necessary for a full understanding of the Shared
Intellectual Property that is or might be useful to the Powder
Coatings Business and assure that such copy is physically located at
the German Facility at the Closing.
Under no circumstances will the Ferro Sellers have any liability
whatsoever to the RandH Buyers with respect to the transfer of information
regarding the Shared Intellectual Property beyond what is stated in this
Section 3.4 or as to the terms of the Shared Intellectual Property
Agreement.
3.5 CONSENTS. From today until the Closing, the Ferro Sellers will use their
reasonable efforts to obtain any required consents or approvals
(collectively, the "Material Consents") relating to the following:
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(A) License(s) and maintenance agreement(s) for Data Match color
matching hardware and software used at UK, German and Spain
Facilities;
(B) Lease for the German Facility effective September 1, 2002, by and
between Xxxxxxx Xxxxxxxxx-Laymann and RPL Germany;
(C) Software license and hardware/software maintenance agreements for
Comet-Blending (ERP) software;
(D) Software license and software/hardware maintenance agreements for
Blending financial software;
(E) Software license and software/hardware maintenance agreements for DB
Direct MC e-commerce software connecting plant systems to the bank;
(F) Consent of Xxxxxx Xxxxx Water Authority to permit discharge of Waste
Water Effluent by Rohm and Xxxx (UK) Limited under the authorization
granted Ferro UK by consent dated March 1, 1988 (Permit No.
250/23320530);
(G) Consent of Walsall Metropolitan Borough Council to the transfer of
or subdivision of property and issuance of new permit or to permit
RandH (UK) to operate under] Ferro Great Britain's Certificate of
Lawful Existing Use or Development; and
(H) Consent of electric utility permitting conveyance of electricity
from Ferro Spain to RandH Spain under existing metering arrangement
with Ferro Spain.
In addition from today until the Closing, the Ferro Sellers will use their
reasonable efforts to assist the RandH Buyers in obtaining the consents or
approvals (or effective waivers thereof) of all other third-parties whose
consents or approvals are required for the assignment of the Ferro
Sellers' rights under Powder Coatings Business Contracts, Leases,
Licenses, Permits and other similar items. Failure of the parties to
obtain the consents or approvals described in this Section 3.5 shall not
be deemed to be a breach of this Purchase Agreement and shall not give
rise to monetary damages against either party.
3.6 COORDINATION OF PUBLIC ANNOUNCEMENTS. From today until the Closing,
neither party will make any public announcement concerning the
transactions contemplated by this Purchase Agreement without having
previously consulted with and having received the consent of the other
parties, such consent not to be withheld unreasonably. Nothing in the
preceding sentence, however, shall prevent any party from making any
announcement required by law, by the rules of any securities exchange, or
by any listing agreement with a securities exchange to which such party is
a party or by which it is bound. The parties will cooperate in the
planning, preparation, and issuance of any and all public announcements
concerning this Purchase Agreement and the transactions contemplated by
this Purchase Agreement.
3.7 CONSULTATIONS WITH EMPLOYEE REPRESENTATIVES. From today until the Closing,
the Ferro Sellers will timely comply with all obligations under applicable
national laws to consult with employees or their representatives, consult
with works councils and/or
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provide relevant information directly to affected employees and/or their
employee representatives, including the following:
(A) The UK Transfer of Undertakings (Protection of Employment)
Regulations 1981 (as amended),
(B) Section 613 of the German Civil Code (Burgerliches Gesetzbuch) and
the German Employee-Works Council Relation Act
(Betriebsverfassungsgesetz); and
(C) Section 44 of the Spanish Worker's Statute (Estatuto de
losTrabajadores, Articulo 44, La sucesion de empresa).
Such information will include notification of the proposed Closing Date,
the grounds for the transfer, the legal, economic, and social consequences
of the transfer on the affected employees, and measures foreseen
(consistent with the terms and conditions of this Purchase Agreement) for
the affected employees. The RandH Buyers will provide the Ferro Sellers
with full cooperation in connection with the preparation and delivery of
such information to the relevant employee representatives.
3.8 REGULATORY APPROVALS. Immediately after the execution and delivery of this
Purchase Agreement, the parties will promptly proceed with the preparation
and filing of any required filings necessary in order to obtain the
approval or authorization of those governmental agencies or
instrumentalities whose approval or authorization is necessary in order to
consummate the transactions contemplated by this Purchase Agreement,
including the following:
(A) If required, notification to the Spanish Competition Service
(Servicio de Defensa de la Competencia) located within the
Secretariat General of Economic Policy and Defense of Competition
(Secretaria General de Politica Economica y Defensa de la
Competencia) within the Ministry of Economy (Ministerio de Economia)
pursuant to the Law on Defense of Competition (Ley de Defensa de la
Competencia);
(B) The required notification to the German Federal Cartel Office
(Bundes-kartellamt) under ss. 39 GWB (Gesetz gegen
Wettbewerbsbeschrankungen); and
(C) The required notification to the Austrian Cartel Court
(KartellgerichtI) pursuant to ss.42 of the Austrian Cartel Law.
The parties will cooperate in good faith to take such action as may
reasonably be necessary to obtain any necessary clearances or to procure
the termination of any waiting or suspension periods under any relevant
laws relating to antitrust or competition, including furnishing such
additional information as may be required by relevant competition
authorities, so as to make possible consummation of the transactions
contemplated by this Purchase Agreement at the earliest practicable date.
The RandH Buyers will not, however, be required to hold separate or
dispose of (directly or indirectly) any assets or business units or agree
to be subject to any material restriction on its right to conduct its
business operations, including the Powder Coatings Business, after the
Closing.
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ARTICLE 4 - CONDITIONS
4.1 CONDITIONS TO THE RANDH BUYERS' OBLIGATIONS. The obligation of the RandH
Buyers to consummate the transactions contemplated by this Purchase
Agreement is subject to the satisfaction of the following conditions at or
before the Closing:
(A) The representations and warranties of the Ferro Sellers contained in
Section 7.1 of this Purchase Agreement shall be true, accurate, and
complete as of today and as of the Closing (except with respect to
the effect of transactions contemplated or permitted by this
Purchase Agreement);
(B) The representations and warranties of the Ferro Sellers contained in
Section 7.2 of this Purchase Agreement shall be true, accurate, and
complete in all material respects as of today and as of the Closing
(as if such representations and warranties had been made anew as of
the Closing except with respect to the effect of transactions
contemplated or permitted by this Purchase Agreement, changes
resulting from the passage of time on dated material in the Powder
Coatings Disclosure Package, and transactions in the ordinary course
of business not in breach of the Ferro Sellers' obligations under
this Purchase Agreement); provided, however, that for purposes of
determining the satisfaction of the condition contained in this
Section 4.1(B), qualifications to such representations and
warranties relating to materiality, Material Event or a material
adverse effect will be disregarded but such condition will be deemed
to be satisfied unless the failure or failures of such
representations and warranties (after giving effect to the previous
proviso) to be true, accurate and complete, would, individually or
in the aggregate, represent or reasonably be expected to represent a
Material Event;
(C) The Ferro Sellers shall have performed and complied with all
material undertakings required by this Purchase Agreement to be
performed or satisfied by the Ferro Sellers before the Closing;
(D) The Ferro Sellers shall have taken all corporate and other
proceedings or actions necessary to be taken by the Ferro Sellers
for consummation of the transactions contemplated by this Purchase
Agreement;
(E) The Ferro Sellers shall be prepared to execute and deliver the
documents listed in Appendix L and the Other Agreements;
(F) With respect to each of the Material Consents either
(1) Such Material Consents shall have been obtained and be in full
force and effect or
(2) The Ferro Sellers shall have agreed -
(a) To provide the RandH Buyers with an alternative
arrangement that lawfully provides the RandH Buyers with
the Ferro Sellers' rights and benefits under the under
the Contract, Lease, License, or Permit to which the
Material Consent relates, and
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(b) To indemnify the RandH Buyers and hold the RandH Buyers
harmless from an against any liability, damage, claim,
cost, or expenses (including reasonable attorneys' fees)
arising out of or resulting from the failure to obtain
such Material Consent;
(G) All requisite waiting periods of governmental authorities shall have
expired;
(H) There shall not have been issued and in effect any injunction or
similar legal order prohibiting or restraining consummation of any
of the transactions contemplated in this Purchase Agreement by a
governmental authority;
(I) There shall not have been commenced or threatened by any
governmental entity any lawsuit or proceeding challenging in any
material way the legality or the consummation of the transactions
contemplated in this Purchase Agreement; and
(J) There shall not have been commenced by any person other than a
governmental authority any lawsuit or proceeding that is likely to
have the effect of preventing, delaying, making illegal, imposing
material limitations or conditions on consummation of the
transactions contemplated by this Purchase Agreement.
4.2 CONDITIONS TO THE FERRO SELLERS' OBLIGATIONS. The obligation of the Ferro
Sellers to consummate the transactions contemplated by this Purchase
Agreement is subject to the satisfaction of the following conditions at or
before the Closing:
(A) The representations and warranties of RandH contained in Section 7.3
of this Purchase Agreement shall be true, accurate, and complete in
all material respects as of today and as of the Closing (except with
respect to the effect of transactions contemplated or permitted by
this Purchase Agreement);
(B) The RandH Buyers shall have performed and complied with all material
undertakings required by this Purchase Agreement to be performed or
satisfied by the RandH Buyers before the Closing;
(C) The RandH Buyers shall have taken all corporate and other
proceedings or actions necessary to be taken by the RandH Buyers for
consummation of the transactions contemplated by this Purchase
Agreement;
(D) The RandH Buyers shall be prepared to deliver the documents listed
in Appendix M, the Other Agreements;
(E) All Material Consents shall either have been obtained and be in full
force and effect, or shall have been waived by the Ferro Sellers,
(F) There shall not have been issued and in effect any injunction or
similar legal order prohibiting or restraining consummation of any
of the transactions contemplated in this Purchase Agreement by a
governmental authority;
(G) There shall not have been commenced or threatened by any
governmental entity any lawsuit or proceeding challenging in any
material way consummation of the transactions contemplated in this
Purchase Agreement;
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(H) There shall not have been commenced by any person other than a
governmental authority any lawsuit or proceeding that is likely to
have the effect of preventing, delaying, making illegal, imposing
material limitations or conditions on consummation of the
transactions contemplated by this Purchase Agreement; and
(I) All of the conditions precedent to the closing contemplated in a
Purchase Agreement dated today's date by and among International
Paint, Inc. ("IPI") and Ferro, Ferro Enamel Argentina S.A., and
Ferro Mexicana S.A. de C.V. shall have been duly satisfied and/or
waived and the parties thereto shall be prepared to proceed with
such closing simultaneously with the Closing contemplated by this
Purchase Agreement.
4.3 PARTIES' BEST EFFORTS. From today until the Closing, the parties will
cooperate and use their respective best efforts to cause the conditions
set forth in this Article 4 over which they may respectively have
influence or control to be satisfied as soon as reasonably practicable.
ARTICLE 5 - CLOSING
5.1 THE CLOSING. For purposes of this Purchase Agreement, the term "Closing"
means the time at which the transactions contemplated by this Purchase
Agreement will be consummated after satisfaction or waiver of the
conditions set forth in Article 4 of this Purchase Agreement.
5.2 DATE, TIME, AND PLACE OF CLOSING. The Closing will take place at 10:00
a.m. (Eastern Time) on the later to occur of (A) August 30, 2002, or (B) a
date to be mutually agreed by the parties not later than 30 days after the
date on which the last of the conditions set forth in Sections 4.1 and 4.2
and comparable provisions in the purchase agreement with the IPI shall
have occurred (the "Closing Date"). The Closing will take place at the
offices of Squire, Xxxxxxx & Xxxxxxx, 4900 Key Tower, 127 Public Square,
Cleveland, Ohio, or at such other place or places as the parties may agree
in writing. The Closing will be deemed to have occurred as of 11:59 p.m.
on the Closing Date (the "Closing Time").
5.3 THE RANDH BUYERS' OBLIGATIONS. At the Closing, the RandH Buyers will
deliver the following to the Ferro Sellers:
(A) The documents, certificates, and other items referred to in Appendix
M;
(B) Copies of the following agreements (the "Other Agreements") duly
executed by authorized directors and/or officers of the RandH
Buyers:
(1) A lease (the "Xxxxxxxx Lease") of the Xxxxxxxx Facility
in the form and to the effect set forth on Appendix G;
provided, however, that, if the parties have not by the
Closing obtained a court order pursuand to section 38(4)
of the Landlord and Xxxxxx Xxx 0000, as amended by the
Law of Property Xxx 0000, to exclude the Xxxxxxxx Lease
from the security of tenure legislation, then RandH UK
will instead deliver a duly executed temporary license
agreement on substantially the same terms as the
Xxxxxxxx Lease pending receipt of such court order;
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(2) A transition and services agreement (the "Xxxxxxxx
Services Agreement") for the Xxxxxxxx Facility in the
form and to the effect set forth on Appendix H;
(3) A lease (the "Castellon Lease") of the Xxxxxxxxx
Facility in the form and to the effect set forth on
Appendix I;
(4) A transition and services agreement (the "Castellon
Services Agreement") for the Xxxxxxxxx Facility in the
form and to the effect set forth on Appendix J; and
(5) A technology license agreement (the "VAMP License") in
the form and to the effect set forth on Appendix K.
(C) Such instruments as may be necessary or appropriate to reflect the
RandH Buyers' assumption of the Assumed Liabilities effective as of
the Closing; and
(D) The amount specified in Section 2.8(A).
5.4 THE FERRO SELLERS' OBLIGATIONS. At the Closing, the Ferro Sellers will
deliver to the RandH Buyers the following:
(A) The documents, certificates, and other items referred to in Appendix
L;
(B) Copies of the Other Agreements as follows:
(1) The Xxxxxxxx Lease (or the license referred to in
Section 5.3(B)(2) above) duly executed by a director of
Ferro UK;
(2) The Xxxxxxxx Services Agreement duly executed by a
director of Ferro UK;
(3) The Xxxxxxxxx Lease duly executed by a director of Ferro
Spain;
(4) The Castellon Services Agreement duly executed by a
director of Ferro Spain; and
(5) The VAMP License duly executed by an authorized officer
of Ferro.
(C) Legal and beneficial Ownership of the Acquired Assets as
contemplated in this Purchase Agreement; (and on the basis that all
Tangible Personal Property located in the UK shall be delivered to
RandH at the premises comprised in the Xxxxxxxx Lease), and
(D) Such deeds, bills of sale, and such other instruments as may be
necessary or appropriate to reflect the Ferro Sellers' conveyance of
the Acquired Assets to the RandH Buyers.
5.5 LOCAL FORMALITIES. If, in the reasonable opinion of counsel for either
party, local law or custom in Germany, Spain, Sweden, the United Kingdom
or any other jurisdiction require additional formalities (such as
notarization), filings, or consents in order to give legal effect to the
transactions contemplated by this Purchase Agreement, then the
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parties will cooperate to carry out such formalities simultaneously with
or before the Closing, but with effect as of the Closing Time. If either
party desires that the specific terms and conditions (including price
allocation) of this Purchase Agreement applicable to a given jurisdiction
be put in writing in a separate agreement or instrument, then the parties
will cooperate to prepare and execute such separate agreement, but such
separate agreement will (unless the parties expressly agree otherwise in a
signed document that refers to this Section 5.5) in all events be
interpreted consistently with and as subordinate to the terms and
conditions of this Purchase Agreement.
ARTICLE 6 - ACTIONS AFTER CLOSING
6.1 FURTHER CONVEYANCES. After the Closing the Ferro Sellers will, without
further cost or expense to the RandH Buyers, execute and deliver to the
RandH Buyers (or cause the same be executed and delivered to the RandH
Buyers), such additional instruments of conveyance, and the Ferro Sellers
shall take such other and further actions as the RandH Buyers may
reasonably request and which are ordinarily provided by a seller, more
completely to sell, transfer, and assign to the RandH Buyers and vest in
the RandH Buyers Ownership of the Acquired Assets.
6.2 FURTHER CONSENTS. Subject to the provisions of Section 4.1(F), if and to
the extent the parties fail to obtain before Closing the consent or
approval (or an effective waiver thereof) of any third-party with respect
to any item described in Section 3.5, then after the Closing --
(A) Until such consent or approval (or an effective waiver thereof) has
been obtained --
(1) On behalf of the Ferro Sellers, the RandH Buyers will
perform all of the Ferro Sellers' duties with respect to
such item, and
(2) On behalf of the RandH Buyers, the Ferro Sellers will
exercise all of the Ferro Sellers' rights with respect
to such item as directed by the RandH Buyers.
(B) The parties will use reasonable efforts to obtain from such third
parties the consents or approvals (or effective waivers thereof).
(C) If the parties are unable to obtain any such consent, approval, or
waiver, then
(1) This Purchase Agreement shall not constitute or be
deemed to be a contract to assign the same if an
attempted assignment without such consent, approval, or
waiver would constitute a breach of such item or create
in the issuer or any party thereto the right or power to
cancel or terminate such item; and
(2) The Ferro Sellers will cooperate with the RandH Buyers
in any reasonable arrangement designed to provide the
RandH Buyers with the benefit of the Ferro Sellers'
rights under such item, including enforcement (at the
RandH Buyers' expense) of any and all rights of the
Ferro Sellers against such third-party as the RandH
Buyers may reasonably request.
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In use of its reasonable efforts under subsection (C) above, the Ferro
Sellers will not be obligated to pay any additional consideration in order
to obtain any consent, approval, or waiver. The Ferro Sellers will,
however, cooperate with the RandH Buyers in obtaining a reasonable and
economic solution with such third-party.
6.3 ACCOUNTING REPORTS. After the Closing, the RandH Buyers will cause the
management of the Powder Coatings Business to provide to the Ferro Sellers
-
(A) Such records and accounts as are prepared by the RandH Buyers in
accordance with its normal accounting procedures and such other
records, accounts or reports as the Ferro Sellers may reasonably
request, or
(B) In the alternative, at the RandH Buyers' election, access (including
access by the Ferro Sellers' outside accountants), during normal
business hours and upon at least five business days' prior written
notice, to all such information as may reasonably be requested by
the Ferro Sellers in order to permit the Ferro Sellers to complete
their financial statements and reports relating to the pre-Closing
activities of the Powder Coatings Business and to satisfy normal
quarterly and year-end reporting and audit requirements.
The RandH Buyers will not, however, be under any obligation to generate
independent records or accounts for the Ferro Sellers.
6.4 NONCOMPETITION. In order to protect the goodwill of the Powder Coatings
Business, the Ferro Sellers undertake that for a period of five years
after the Closing neither the Ferro Sellers nor any of their Affiliates
nor any successor or assign of any of the foregoing will, directly or
indirectly, engage in, or have an ownership interest in or act as agent,
advisor, consultant or licensor of or to any person that is engaged in any
business that competes with the Powder Coatings Business (the "Noncompete
Business"). Nothing in this Section 6.4, however, shall be deemed to
prohibit or restrict the Ferro Sellers, nor any of their Affiliates nor
any successor or assign of any of the foregoing -
(A) From continuing to conduct and develop any business in which any of
such companies are currently engaged, or, in the case of any
successor or assign of any of the foregoing, any business in which
such successor or assign was engaged before succeeding to the
business of such company (whether by share acquisition, asset
acquisition or otherwise), including the continued conduct of the
Ferro Sellers' and their Affiliates' porcelain enamel, ceramic frit
and glaze, and electronic component coatings businesses and the
powder coatings business conducted by Ferro and its Affiliates in
North and South America and Asia/Pacific;
(B) From acquiring or owning less than a 5% equity interest in any
publicly-traded company (whether or not such company is engaged in a
business that competes with the Noncompete Business);
(C) From acquiring less than a 20% equity interest in any company or
other entity that is engaged in a business that competes with the
Noncompete Business if the annual sales from such entity's competing
business or entity do not exceed the lesser of $100,000,000 or 10%
of such business' or entity's total revenues in the 12-month period
immediately preceding such acquisition provided that
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(1) The acquisition of such competing business was not the
principal purpose of such acquisition; and
(2) Neither the Ferro name nor Ferro logo is used by such entity
in the conduct of such business;
(D) From acquiring a controlling equity interest in any company or other
entity that is engaged in a business that competes with the
Noncompete Business if the annual sales from such entity's competing
business or entity do not exceed 10% of such entity's total revenues
in the 12-month period immediately preceding such acquisition,
provided that
(1) The acquisition of such competing business was not the
principal purpose of such acquisition;
(2) Within 30 days of the closing of such acquisition, the Ferro
Sellers provide the RandH Buyers written notice relating to
the acquisition of the Noncompete Business and then affords
the RandH Buyers (or its nominee) the right to purchase such
Noncompete Business on terms and conditions to be agreed by
the parties;
(3) If the RandH Buyers do not execute a definitive agreement to
purchase such Noncompete Business within 90 days after
receiving such notice, the Ferro Sellers make a good faith
effort to dispose of such Noncompete Business within 12 months
from the end of such 90 day period; and
(4) If the RandH Buyers does not purchase such Noncompete Business
and the Ferro Sellers are unable, despite their good faith
efforts, to complete the disposal of such Noncompete Business
within the 12-month period described in Subsection 6.4(D)(3),
then the Ferro Sellers will pay the RandH Buyers a royalty
equal to 5% percent of the net sales prices on all sales of
competing Products by the Noncompete Business made at any time
from and after the earlier to occur of (i) the date the RandH
Buyers provides written notice of its election not to purchase
the Noncompete Business or (ii) the expiration of the 90-day
period described in Section 6.4(D)(3), until and including the
5th anniversary of the date of this Purchase Agreement.
6.5 USE OF FERRO NAME AND XXXX. Within 180 days after the Closing with respect
to finished goods as the same shall exist at Closing and 90 days after the
Closing in all other cases, the RandH Buyers will institute a procedure
whereby a stamp or other indelible identifying xxxx is affixed to any
stocks of inventory, supplies, sales literature, and similar items on hand
at Closing which bear the Ferro name, trademark, or "Check-in-a-Circle"
logo in order to indicate that the RandH Buyers, and not Ferro or its
Affiliates, is the producer, provider, or manufacturer of such item.
6.6 ACCESS TO FORMER BUSINESS RECORDS. For a period of 10 years after the
Closing, or until any audits of the Ferro Sellers' tax returns relating to
periods before or including the Closing are completed, whichever occurs
later, the RandH Buyers will retain all business records constituting part
of the Acquired Assets. During such period, the RandH Buyers will, during
normal business hours and upon at least five business day's prior written
notice, afford duly authorized representatives of the Ferro Sellers
reasonable access to
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all of such records and will permit such representatives, at the Ferro
Sellers' expense, to make abstracts from, or to take copies of any of such
records created, produced, or obtained before the Closing, for the
purposes of the Ferro Sellers' participation in any tax audits,
litigation, investigation by a governmental body or other proceeding
relating to the Ferro Sellers' conduct of the Powder Coatings Business
before the Closing. During such period, the RandH Buyers will, at the
Ferro Sellers' sole cost and expense, cooperate with the Ferro Sellers,
and cause employees of the Powder Coatings Business to cooperate with the
Ferro Sellers, in furnishing information, evidence, testimony, and other
assistance in connection with any such audit, litigation, investigation or
proceeding relating to the Ferro Sellers' conduct of the Powder Coatings
Business before the Closing.
6.7 ACCESS TO FORMER EMPLOYEES. After the Closing, each party will make
available to the other party such employees (including former employees)
of the Powder Coatings Business, and other employees with personal
knowledge of a particular claim or event, as the other party may
reasonably request in order to defend or prosecute any legal or
administrative action to which the Ferro Sellers or the RandH Buyers are a
party and which relates to the conduct of the Powder Coatings Business.
The requesting party will pay or reimburse the other party for all
reasonable expenses which may be incurred by such employees in connection
therewith, including all travel, lodging, and meal expenses, and will
further compensate the other for the number of whole business days spent
by each such employee in providing such services at the rate of 130% of
the average daily gross pay per business day (excluding the value of
employee benefits) of such employee during the calendar month in which
such services are performed.
6.8 TERMINATION OF INSURANCE COVERAGE. At or after the Closing, the Ferro
Sellers and their Affiliates will have the right to terminate any and all
insurance coverage affecting the Powder Coatings Business, with the effect
that the RandH Buyers will have no right of recovery with respect to any
claim under policies or for refunds of premiums of insurance that
previously covered the Powder Coatings Business. The Powder Coatings
Business will, however, continue to be entitled to recoveries (net of
deductibles and out-of-pocket claims handling costs) after the Closing
under occurrence-based insurance policies in respect of insured events
that occurred before the Closing and the Ferro Sellers will promptly pay
over such net recoveries upon receipt. The Ferro Sellers will be
responsible for the administration of claims for such recoveries.
6.9 REMOVAL OF RETAINED ASSETS. At or as soon as reasonably practicable after
the Closing, the Ferro Sellers will remove or cause to be removed from the
Spanish Facility and the UK Facility any Retained Assets located thereat.
6.10 CHANGE OF CORPORATE NAME. Promptly after the Closing, the Ferro Sellers
will cause RPL Germany and RP Sweden (and, as relevant, any other
Affiliates) to take whatever action is required to change their corporate
names to a name that does not include any reference to "Xxxx-Xxxxxx",
"Ruhr Pulverlack" or "RPL" or any name that is confusingly similar to any
of such names.
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ARTICLE 7 - REPRESENTATIONS AND WARRANTIES
7.1 THE FERRO SELLERS' GENERAL REPRESENTATIONS AND WARRANTIES. The Ferro
Sellers represent and warrant jointly and severally to the RandH Buyers
the following:
(A) ORGANIZATION AND EXISTENCE. With respect to the Ferro Sellers:
(1) Ferro is a corporation duly organized, validly existing, and
in good standing under the laws of the State of Ohio;
(2) Ferro Holland is a private company with limited liability
(besloten vennootschap) duly incorporated and existing under
the laws of The Netherlands with its corporate seat in
Rotterdam, The Netherlands;
(3) Ferro Spain is a corporation (sociedad anonima) duly organized
and existing under the laws of Spain;
(4) Ferro UK is a private limited company duly organized and
existing under the laws of England and Wales;
(5) RPL Germany is a limited liability company (Gesellschaft mit
beschrankter Haftung) duly organized and existing under the
laws of Germany; and
(6) RP Sweden is a company limited by shares (Aktiebolag) duly
incorporated and existing under the laws of Sweden.
(B) POWER AND AUTHORITY. The Ferro Sellers have full power and authority
under their respective constitutive documents and the laws of the
jurisdictions in which they respectively are organized to execute,
deliver, and perform this Purchase Agreement and have full power and
authority to own and operate their respective properties and conduct
the Powder Coatings Business as the same has been and is being
conducted.
(C) AUTHORIZATION. The execution, delivery, and performance of this
Purchase Agreement by the Ferro Sellers have been duly authorized by
all requisite corporate action on the part of the Ferro Sellers.
(D) BINDING EFFECT. This Purchase Agreement is a valid, binding, and
enforceable legal obligation of the Ferro Sellers, except as
enforceability may be limited by principles of equity and by
bankruptcy and insolvency laws generally.
(E) NO DEFAULT. Neither the execution and delivery of this Purchase
Agreement nor the Ferro Sellers' full performance of their
respective obligations under this Purchase Agreement will violate or
breach, or otherwise constitute or give rise to a Default under, the
terms or provisions of the Ferro Sellers' respective constitutive
documents or of any material contract, commitment, or other
obligation to which any of the Ferro Sellers are a party.
(F) FINDERS. With the sole exception of Xxxxxxx Xxxxx Xxxxxx Inc., the
Ferro Sellers have not engaged and are not directly or indirectly
obligated to any third-
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party acting as a broker, finder, or similar capacity in connection
with the transactions contemplated by this Purchase Agreement.
7.2 THE FERRO SELLERS' REPRESENTATIONS AND WARRANTIES CONCERNING THE POWDER
COATINGS DISCLOSURE PACKAGE. Simultaneously with the execution and
delivery of this Purchase Agreement, the Ferro Sellers are delivering to
the RandH Buyers a bound volume of disclosure materials (the "Disclosure
Package") entitled the "Powder Coatings Disclosure Package" and consisting
of 19 Parts, consecutively lettered A-S, inclusive. The Ferro Sellers
represent and warrant jointly and severally to the RandH Buyers that the
Disclosure Package contains the information described in Appendix N. In
addition, the Ferro Sellers represent and warrant jointly and severally to
the RandH Buyers the following:
(A) ORGANIZATION. Except as otherwise disclosed on Part A of the
Disclosure Package, except insofar as the powder coating business
conducted by Ferro and its Affiliates in North and South America and
the Asia/Pacific region are concerned, the Ferro Sellers do not hold
any equity interest, directly or indirectly, in any company,
corporation, partnership, joint venture, business, firm, or other
entity which engages in any business in competition with the Powder
Coatings Business.
(B) FINANCIAL STATEMENTS. Except as otherwise disclosed on Part B, (1)
the financial statements contained in Subparts B-1 to B-6 (the
"Financial Statements") have been derived from the books of account
of the Ferro Sellers which have been created and maintained by the
relevant Ferro Seller in the ordinary course;and (2) the Financial
Statements fairly present, in all material respects, in accordance
with U.S. generally accepted accounting principles consistently
applied, the financial condition, operating results and changes in
financial position of the Powder Coatings Business for the periods
and as of the dates stated.
(C) INVENTORIES. Except as otherwise disclosed on Part C, (1) the Ferro
Sellers Own all Inventories described on Part C; (2) such
Inventories have been valued on the books of the Ferro Sellers in
accordance with the Accounting Principles; (3) except as and to the
extent reserves and provisions have been established on the books of
the Powder Coatings Business in accordance with the Accounting
Principles, such inventories are usable and saleable in the ordinary
course of business and meet all applicable manufacturing
specifications of the Ferro Sellers, and (4) in the Ferro Sellers'
judgment, such inventories are sufficient for the continued conduct
of the Powder Coatings Business as the same has been and is
currently being conducted.
(D) TRADE ACCOUNTS RECEIVABLE. Except as otherwise disclosed on Part D,
(1) the Ferro Sellers Own all of the Trade Accounts Receivable
listed or described on Part D; (2) such Trade Accounts Receivable
arose out of the ordinary course conduct of the Powder Coatings
Business and are valid obligations, (3) except as and to the extent
reserves and provisions have been established on the books of the
Powder Coatings Business in accordance with the Accounting
Principles, such Trade Accounts Receivable are carried on the books
of the Powder Coatings Business at net realizable values, and (4)
none of such Trade Accounts Receivable is owing to the Ferro Sellers
or any of their Affiliates.
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(E) TRADE ACCOUNTS PAYABLE. Except as otherwise disclosed on Part E, (1)
all of the liabilities reflected on the books of the Ferro Sellers
arose out of the ordinary course conduct of the Powder Coatings
Business; (2) no such liabilities are owing to the Ferro Sellers or
any of their Affiliates; and (3) no Ferro Seller is in Default in
any manner likely to be materially adverse to the Powder Coatings
Business Condition under any note, bond, debenture, mortgage,
indenture, security agreement, guaranty, or other instrument of
indebtedness.
(F) REAL PROPERTY. Except as otherwise disclosed on Part F of the
Disclosure Package, (1) the Ferro Sellers Own all of the real
properties listed as "owned" on Subpart F-1; (2) the leases under
which the real property listed as "leased" on Subpart F-2 are leased
are valid and subsisting; (3) none of the Ferro Sellers is in
material Default under any lease of any such real properties nor, to
the Knowledge of the Ferro Sellers, is any third party in material
Default under any such lease; and (4) the improvements to the real
property listed on Part F are in reasonably good condition and
repair, ordinary wear and tear excepted and are, in the Ferro
Sellers' reasonable judgment, useable in the ordinary course in the
conduct of the Powder Coatings Business as presently conducted.
(G) TANGIBLE PERSONAL PROPERTY. Except as otherwise disclosed on Part G
of the Disclosure Package, (1) the Ferro Sellers Own all tangible
personal property listed as "owned" on Subparts G-1 to G-3; (2) the
leases under which the tangible personal property listed as "leased"
on Subparts G-4 to G-5 are leased are valid and subsisting; (3) the
Ferro Sellers are not in material Default under any lease listed on
Part G; (4) the items of tangible personal property listed on Part G
are in reasonably good condition and repair, ordinary wear and tear
excepted; and (5) in the Ferro Sellers' judgment, such tangible
personal property is sufficient for the continued conduct of the
Powder Coatings Business as the same has been and is currently being
conducted.
(H) INTELLECTUAL PROPERTY. Except as otherwise disclosed on Part H of
the Disclosure Package, (1) the Ferro Sellers Own all of the
Acquired Intellectual Property listed as "owned" on Subparts H-1 to
H-4 and, for each patent described thereon, have filed and recorded
with the patent offices in the countries where such patents exist
all assignments necessary to establish their record ownership of
such patents; (2) the license, technology transfer, or similar
agreements to employ the Acquired Intellectual Property listed as
"licensed by" on Subpart H-5 are valid and subsisting agreements;
(3) except with respect to the items listed in such Subpart H-6,
none of the Ferro Sellers is obligated to pay any amount, whether as
a royalty, license, fee, or other payment to any person in order to
use any of the Acquired Intellectual Property used by the Powder
Coatings Business; (4) the license, technology transfer, or similar
agreements to employ the Acquired Intellectual Property listed as
"licensed to" on Subpart H-7 are valid and subsisting agreements;
(5) except with respect to the items listed in such Subpart H-7,
none of the Ferro Sellers has granted any rights or interest to any
person in connection with any of the Intellectual Property described
in Part H; (6) the Ferro Sellers have received no notice from any
third party alleging that the conduct of the Powder Coating Business
infringes the intellectual property rights of such third party, (7)
in their conduct of the Powder Coatings Business, the Ferro Sellers
do not infringe, in any material respect, any issued patent or
published patent application of any third party; (8) the Ferro
Sellers have no knowledge that any person is currently infringing
any of the Acquired Intellectual
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Property; (9) the Acquired Intellectual Property, together with the
Retained Intellectual Property, includes all material intellectual
property used by the Ferro Sellers in their conduct of the Powder
Coatings Business; and (10) in the Ferro Sellers' reasonable
judgment, the Acquired Intellectual Property and the RandH Buyers'
unrestricted right to use the Shared Intellectual Property as
provided in Section 2.2(F) would (if used with the Ferro name and
xxxx) be sufficient for the continued conduct of the Powder Coatings
Business as the same has been and is currently being conducted.
(I) INDEBTEDNESS. Except as otherwise disclosed on Part I of the
Disclosure Package, the Powder Coatings Business is not in material
Default under any note, bond, debenture, mortgage, indenture,
security agreement, guaranty, or other instrument of Indebtedness.
(J) LITIGATION. Except as otherwise disclosed on Part J of the
Disclosure Package, (1) there exists no litigation, proceedings,
actions, claims, or investigations at law or in equity pending or,
to the Ferro Sellers' knowledge, threatened against the Ferro
Sellers relating to or arising out of the Powder Coatings Business;
and (2) none of the Ferro Sellers is subject to any material writ,
injunction, order, or decree of any court, agency, or other
governmental authority.
(K) CONTRACTS. Except as otherwise disclosed on Part K of the Disclosure
Package, (1) each of the contracts, commitments, and other
obligations listed on Part K is a valid and binding obligation of
the Ferro Sellers and, to the Ferro Sellers' knowledge, the other
party or parties thereto; (2) neither the Ferro Sellers nor, to the
Ferro Sellers' knowledge, any other party thereto has terminated,
cancelled, or substantially modified any contract, commitment, or
other obligation identified in Part K; (3) neither the Ferro Sellers
nor, to the Ferro Sellers' knowledge, any other party thereto is in
material Default under any contract, commitment, or other obligation
identified in Part K; and (4) the Ferro Sellers have received no
written notice from any third-party alleging that any of the Ferro
Sellers is in material Default under any such contract, commitment,
or other obligation identified in Part K.
(L) EMPLOYEES AND EMPLOYEE BENEFITS. Except as otherwise disclosed on
Part L of the Disclosure Package, (1) the Ferro Sellers have no
employment contracts in respect of the Powder Coatings Business or
its employees, including any non-competition agreements or
agreements that provide for payments to employees upon the Closing
of this transaction; (2) the Ferro Sellers have no material
contingent liabilities in respect of any Employee Benefit
Arrangements; (3) the Powder Coatings Business has performed all
material obligations owing their respective employees; (4) the Ferro
Sellers have supplied the RandH Buyers with all material details of
the Employee Benefit Arrangements; (5) the Ferro Sellers have at all
times been in material compliance with the terms of the Employee
Benefit Arrangements and with all applicable laws, regulations, tax
qualification requirements and other relevant requirements of a
competent governmental body or regulatory authority applicable to
such Employee Benefit Arrangements; (6) all contributions, premiums
and other payments due from Ferro Sellers or any of their Affiliates
to (or under) any Employee Benefit Arrangement have been fully paid
or, to the extent not required to be paid on or before such date,
have been provisioned for by the relevant Ferro Seller as required
by law or generally accepted accounting principles; (7) the Ferro
Sellers
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have complied with all applicable legal requirements governing
consultations with employees, employee representatives, and works
councils regarding this transaction and its anticipated consequences
to employees of the Powder Coatings Business; and (8) none of the
Employees listed on Part 1 of Appendix P has been treated by the
Ferro Sellers as a self-employed agent or independent contractor
(including for purposes of social security, income taxation, or
otherwise).
(M) COMPLIANCE WITH ENVIRONMENTAL LAWS. Except as otherwise disclosed on
Part M of the Disclosure Package, (1) the conduct of the Powder
Coatings Business is in material compliance with all Environmental
Laws relating to emissions, discharges, and releases of Hazardous
Materials into land, soil, ambient air, water, and the atmosphere;
(2) the conduct of the Powder Coatings Business is in material
compliance with all Environmental Laws applicable to the generation,
treatment, storage, transportation, and disposal of Hazardous
Materials; and (3) there exist no Hazardous Materials on or in the
real properties that are part of the Powder Coatings Business the
presence of which is likely to have a materially adverse effect on
the Powder Coatings Business Condition.
(N) COMPLIANCE WITH HEALTH AND SAFETY LAWS. Except as otherwise
disclosed on Part N of the Disclosure Package, the conduct of the
Powder Coatings Business is in material compliance with all Health
and Safety Laws applicable to the Powder Coatings Business.
(O) COMPLIANCE WITH OTHER LAWS. Except as otherwise disclosed on Part O
of the Disclosure Package, the Powder Coatings Business is in
material compliance with all statutes, ordinances, regulations, and
other governmental requirements applicable to the conduct of the
Powder Coatings Business (other than Environmental Laws and Health
and Safety Laws).
(P) TAXES. Except as otherwise disclosed in Part P of the Disclosure
Package, (1) all tax returns required to be filed by the Powder
Coatings Business before Closing with respect to the Powder Coatings
Business have been or will be filed on or before the Closing and
were true and correct in all material respects; (2) all taxes due
and payable before Closing on such returns have been or will be paid
when required by law and, to the extent not paid, have been accrued
in accordance with Ferro standard accounting practice; and (3) the
assets of the Powder Coatings Business are not encumbered by any
Encumbrance arising out of unpaid taxes which are due and payable.
(Q) INSURANCE. Except as otherwise disclosed in Part Q of the Disclosure
Package, the Ferro Sellers have insured or self-insure the assets
and properties of the Powder Coatings Business against those
insurable risks and to an extent the Ferro Sellers deem reasonably
necessary for their continued conduct of the Powder Coatings
Business and for protection against injury, damage, or loss.
(R) CUSTOMERS. Except as set forth on Part R of the Disclosure Package,
since July 1, 2002, no customer that accounted for more than
$500,000 of the aggregate sales revenues of the Powder Coatings
Business during the 12-month period ended June 30, 2002, (1)
terminated or elected not to renew (or provided written notice to
the Ferro Sellers of its intent to terminate or not renew) its
existing contractual relationship with the Powder Coatings Business,
or (2) provided
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notice to the Ferro Sellers of its intent to materially reduce its
purchases from the Powder Coatings Business over the 12-month period
commencing July 1, 2002, in either case excluding any such
development (a) resulting from the parties' public announcement of
the transactions contemplated by this Purchase Agreement, (b) events
beyond the Ferro Sellers' control occurring between today and the
Closing Date, or (c) resulting from actions taken by the RandH
Buyers that the RandH Buyers knows or should have known would have
an adverse effect on the Powder Coatings Business.
(S) NO MATERIAL EVENTS. Except as otherwise disclosed in Part S of the
Disclosure Package, (1) the Powder Coatings Business has been
conducted only in the ordinary and usual course since June 30, 2002,
and (2) no Material Events have occurred since June 30, 2002.
7.3 RANDH'S REPRESENTATIONS AND WARRANTIES. RandH represents and warrants to
the Ferro Sellers the following:
(A) ORGANIZATION AND EXISTENCE. With respect to the RandH Buyers,
(1) RandH is a corporation duly organized, validly existing, and
in good standing in the State of Delaware;
(2) RandH UK is a private limited company duly organized and
existing under the laws of England and Wales;
(3) RandH Spain is a corporation (sociedad anonima) duly organized
and existing under the laws of Spain;
(4) RandH Germany is a limited liability company (Gesellschaft mit
beschrankter Haftung) duly organized and existing under the
laws of Germany; and;
(5) RandH Denmark is a joint stock company (Aktieselskab) duly
organized and existing under the laws of Denmark.
(B) POWER AND AUTHORITY. The RandH Buyers have full power and authority
under their respective constitutive documents and the laws of the
jurisdictions in which they respectively are organized to execute,
deliver, and perform this Purchase Agreement.
(C) AUTHORIZATION. The execution, delivery, and performance of this
Purchase Agreement have been duly authorized by all requisite
corporate actions on the part of the RandH Buyers.
(D) BINDING EFFECT. This Purchase Agreement is a valid, binding, and
enforceable legal obligation of the RandH Buyers, except as
enforceability may be limited by principles of equity and by
bankruptcy and insolvency laws generally.
(E) NO DEFAULT. Neither the execution and delivery of this Purchase
Agreement nor the RandH Buyers' full performance of their
obligations under this Purchase Agreement will violate or breach, or
otherwise constitute or give rise to a Default under, the terms or
provisions of the RandH Buyers' respective constitutive
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documents or of any material contract, commitment, or other
obligation to which any of the RandH Buyers is a party.
(F) FINDERS. The RandH Buyers have not engaged and are not directly or
indirectly obligated to any third-party acting as a broker, finder,
or similar capacity in connection with the transactions contemplated
by this Purchase Agreement.
7.4 MEANING OF THE "FERRO SELLERS' KNOWLEDGE". Where a statement contained in
this Article 7 is said to be to the "Ferro Sellers' knowledge" (or words
of similar import) such expression means that, after having conducted a
due diligence review and in reliance on due diligence certifications, both
as described in Appendix O, Senior Ferro Management and Powder Coatings
Management believe the statement to be true, accurate, and complete in all
material respects, but that the Ferro Sellers make no further
representation or warranty concerning facts or circumstances that might
have come to the Ferro Sellers' attention if they conducted a broader or
more thorough investigation of the Powder Coatings Business. For purposes
of this Purchase Agreement,
(A) The term "Senior Ferro Management" means the Ferro Chairman & Chief
Executive Officer and his direct reports, and
(B) The term "Powder Coatings Management" means the Director of the
Ferro's Industrial Coatings MBU, the Group Controller of Ferro's
Industrial Coatings MBU, the plant manager of each Facility, the
financial controller of each Facility, and the environmental
compliance officer of each Facility.
7.5 DISCLAIMER. The warranties stated in this Article 7 and warranties
contained in other certifications, instruments, or documents required to
be delivered at the Closing are the only representations and warranties
either party has given the other party in connection with the transactions
contemplated by this Purchase Agreement. Except as set forth in this
Article 7, neither party has made, and each party expressly disclaims, any
other or further representation or warranty, either express or implied,
concerning the subject matter of this Purchase Agreement. All other
warranties either party or anyone purporting to represent either party
gave or might have given, or which might be provided or implied by law or
commercial practice, are hereby excluded.
ARTICLE 8 - SPECIFIC OBLIGATIONS
8.1 EMPLOYEE OBLIGATIONS. The parties' respective obligations with respect to
Employees will be as follows:
(A) EMPLOYEES. For purposes of this Agreement, the term "Employees"
means the employees listed on Part 1 of Appendix P, including -
(1) The employees listed in Part 1.A of Appendix P (the "UK
Employees"),
(2) The employees listed in Part 1.B of Appendix P (the "Spanish
Employees"),
(3) The employees listed in Part 1.C of Appendix P (the "German
Employees"),
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(4) The employees listed in Part 1.D of Appendix P (the "Other
Employees"), and
(5) The employees listed in Part 1.E of Appendix P (the "German
Geschaftsfuhrer");
but not employees listed in Part 2 of Appendix P (the "Excluded
Employees").
(B) TRANSFER OF TRANSFERRED EMPLOYEES. As of the Closing, all Employees
who have not lawfully rejected transfer of their respective
employment contracts to the RandH Buyers (collectively, the
"Transferred Employees") will become employees of the RandH Buyers
and will cease to be employees of the Ferro Sellers.
(C) THE FERRO SELLERS' EMPLOYEE OBLIGATIONS.
(1) The Ferro Sellers will be solely responsible for any and all
liabilities and obligations to any employees or former
employees of the Ferro Sellers who do not become Transferred
Employees, whether arising as a result of any Employee Benefit
Arrangement, by operation of law or otherwise, and whether
existing as of, triggered by, or arising after the Closing.
(2) The Ferro Sellers will be solely responsible for any and all
liabilities and obligations to any Transferred Employees -
(a) For payment of salaries and wages earned before the
Closing;
(b) For payment of bonuses and commissions earned as of the
Closing;
(c) For liabilities and obligations under Employee Benefit
Arrangements (other than pension schemes and
arrangements) accrued at or before the Closing;
(d) For payment of all benefits under existing pension
scheme covering the UK Employees (which scheme and
assets associated with such schemes and arrangements
will be retained by the Ferro Sellers) accrued at or
before Closing;
(e) For payment of all benefits under existing pension
schemes and arrangements covering the Other Employees
(which schemes and arrangements and assets associated
with such schemes and arrangements will be retained by
the Ferro Sellers) accrued at or before Closing,
provided, however, that, if the liabilities under such
pensions schemes and arrangements cannot by law be
retained by the Ferro Sellers, then (i) the RandH Buyers
will assume such schemes and arrangements and will be
solely responsible for the payment of benefits under
such schemes and arrangements and (ii) the Ferro Sellers
will transfer to, or arrange for the transfer to, the
RandH Buyers all assets which have been accumulated to
support such schemes and arrangements; and
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(f) For sickness and/or disability payments (whether accrued
before or after Closing) to Transferred Employees who
are not actively working as of the Closing until such
time as such Transferred Employees are certified to
return to full time employment.
(D) THE RANDH BUYERS' EMPLOYEE OBLIGATIONS.
(1) The RandH Buyers will be solely responsible for any and all
liabilities and obligations to any Transferred Employees -
(a) For payment of salaries and wages earned after the
Closing;
(b) For payment of bonuses and commissions earned after the
Closing;
(c) For liabilities and obligations under Employee Benefit
Arrangements (other than pension schemes and
arrangements) accrued after the Closing;
(d) For payment of benefits under existing pension schemes
and arrangements covering the German Employees (whether
accrued before or after the Closing);
(e) For payment of benefits under existing pension schemes
and arrangements covering the Spanish Employees (whether
accrued before or after the Closing); and
(e) For sickness and/or disability payments to Transferred
Employees who are not actively working as of the Closing
from and after such time as such Transferred Employees
are certified to return to full time employment.
(2) If the RandH Buyers terminate the employment of any
Transferred Employee at or within one year after the Closing
under circumstances in which such Transferred Employee would
have been entitled to severance pay and/or benefits if he or
she had terminated employment with a Ferro Seller immediately
before the Closing, then the RandH Buyers will assure that
such terminated Transferred Employee's severance pay and
benefits will be substantially equivalent to the severance pay
and benefits the Transferred Employee would have received
under the applicable Ferro Seller's severance policy.
(E) COMPUTATION OF TRANSFERRED OBLIGATIONS.
(1) GENERALLY. If and to the extent either party pays or is
required to pay any amount for which the other party is
responsible under Section 8.1(C) or (D) above, then the
responsible party will promptly reimburse the paying party for
such payment.
(2) TRANSFERRED OBLIGATIONS. If and to the extent the RandH Buyers
are required to assume or agree to assume any liability in
respect of service rendered or events occurring before the
Closing (a "Transferred
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Obligation"), then, except as otherwise provided in Section
8.1(E)(3) or (E)(4) below, the RandH Buyers will pay such
liability and the Ferro Sellers will reimburse the RandH
Buyers' for the Ferro Sellers' share of such Transferred
Obligations, which will equal -
(a) The amount of the Transferred Obligation minus
(b) The value of any assets directly related to such
Transferred Obligation that have been or are transferred
to the RandH Buyers at Closing.
(3) NON-LUMP SUM OBLIGATIONS. If a Transferred Obligation is a
defined benefit obligation (other than a pension obligation
described in Section 8.1(E)(4) and 8.1(G)(4) below) and is not
dischargeable through a lump sum payment, then
(a) The RandH Buyers will calculate in good faith the amount
of the Transferred Obligation on a Projected Benefit
Obligation basis as defined in FAS 87, FAS 106 or FAS
112, as applicable (or, if FAS 87, FAS 106 or FAS 112 is
not applicable, using accounting principles consistent
with FAS 87, FAS 106 or FAS 112, as appropriate) using
the Projected Unit Credit Method based on plan
provisions as in effect at Closing and applying the
economic assumptions set out in Appendix Q.
(b) The Ferro Sellers will then review the RandH Buyers'
calculation of Transferred Obligations within 60 days
after the RandH Buyers deliver such calculations to the
Ferro Sellers.
(c) The parties will then seek to resolve amicably any
difference in valuation results within 30 days.
(d) If the parties cannot resolve such differences within
such 30-day period, then either party will have the
right to initiate the dispute resolution process set
forth in Article 10 to resolve such dispute, in which
case the dispute will be finally resolved as provided in
Article 10.
(e) The Ferro Sellers will promptly pay over to the RandH
Buyers any amount for which the Ferro Sellers are or are
found to be responsible under this Section 8.1(E)(3).
(4) GERMAN AND SPANISH PENSION OBLIGATIONS. The Ferro Sellers will
pay over to the appropriate RandH Buyer an amount equal to (i)
the pension obligation to which the German Employees (other
than the German Geschaftsfuhrer) and the Spanish Employees
(and, if the RandH Buyers are required to assume the pension
schemes and arrangements described in Section 8.1(C)(2)(e)
above, the Other Employees) are entitled as of the Closing
minus (ii) (euro)1,600,000. The amount of the pension
obligation to which German Employees (other than the German
Geschaftsfuhrer) and the Spanish Employees (and, if the RandH
Buyers are required to assume the pension schemes and
arrangements
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described in Section 8.1(C)(2)(e) above, the Other Employees)
are entitled as of the Closing will be determined as follows:
(a) The Ferro Sellers will calculate in good faith the
amount of such pension obligation on the basis set forth
in Section 8.1(E)(3) above.
(b) The RandH Buyers will then review the Ferro Sellers
calculation of such pension obligation within 60 days
after the Ferro Sellers deliver such calculations to the
RandH Buyers.
(c) The parties will then seek to resolve amicably any
difference in valuation results within the next 30 days.
(d) If the parties cannot resolve such differences within
such 30-day period, then either party will have the
right to initiate the dispute resolution process set
forth in Article 10 to resolve such dispute, in which
case the dispute will be finally resolved as provided in
Article 10.
(e) The Ferro Sellers will promptly pay over to the RandH
Buyers any amount for which the Ferro Sellers are or are
found to be responsible under this Section 8.1(E)(4).
(5) BENEFIT PLAN CARRIERS. If a transfer of an obligation is to be
made from a benefit plan carrier of the Ferro Sellers or their
Affiliates to a benefit plan carrier of the RandH Buyers or
their Affiliates, then the Ferro Sellers and the RandH Buyers
will use commercially reasonable efforts to obtain any
necessary approval of the appropriate regulatory authority as
soon as reasonably practicable after the Closing.
(6) PLAN CONTINUATIONS. To the extent requested by the RandH
Buyers, the Ferro Sellers will, if legally permitted and at
the RandH Buyers' sole cost and expense, allow the RandH
Buyers and their Affiliates to continue the participation of
the Transferred Employees in specified Employee Benefit
Arrangements of the Ferro Sellers and their Affiliates for up
to one year after the Closing Date or, if shorter, such period
which is admissible or practical under the respective local
law or plan rules.
(F) NON-INTERFERENCE. The Ferro Sellers will not employ, solicit
employment or offer employment to any Transferred Employee during
the 12-month period following the Closing without the prior written
consent of RandH. During such period, RandH will not, without the
prior written consent of the Ferro Sellers, employ, solicit, or
offer employment to any Excluded Employee or to any former employee
of the Powder Coatings Business who retired from or voluntarily
terminated employment with the Ferro Sellers during the six-month
period preceding the Closing. Notwithstanding anything to the
contrary contained in this Subsection 8.1(E) neither RandH nor the
Ferro Sellers will be deemed to be in violation of this Subsection
8.1(E) as a consequence of an otherwise unsolicited response to an
advertisement of an employment opportunity on the internet or in any
periodical of general circulation.
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(G) GERMAN GESCHAFTSFUHRER. The following will apply to each of the
German Geschaftsfuhrer:
(1) As soon as practicable after today, RPL Germany will give the
three German Geschaftsfuhrer notice to effect termination of
existing non-competition agreements with each such German
Geschaftsfuhrer and RPL Germany will be solely responsible for
any payment that may be payable to the German Geschaftsfuhrer
under such noncompetition agreements.
(2) RandH Germany will not terminate the employment of any German
Geschaftsfuhrer before the first anniversary of the Closing.
(3) If RandH Germany terminates a German Geschaftsfuhrer's
employment with RandH Germany -
(a) Between the first and second anniversaries of the
Closing, then (i) the Ferro Sellers will be solely
responsible for any severance payment due the German
Geschaftsfuhrer as a consequence of such termination of
employment and (ii) RandH Germany will be solely
responsible for any notice payment due the German
Geschaftsfuhrer as a consequence of such termination of
employment;
(b) Between the second and third anniversaries of the
Closing, then (i) the Ferro Sellers will be responsible
for 50% of any severance payment due the German
Geschaftsfuhrer as a consequence of such termination of
employment, (ii) RandH Germany will be responsible for
the remaining 50% of such severance payment, and (iii)
RandH will be solely responsible for any notice payment
due the German Geschaftsfuhrer as a consequence of such
termination of employment; and
(c) After the third anniversary of the Closing, then RandH
Germany will be solely responsible for any severance
payment and any notice payment due the German
Geschaftsfuhrer as a consequence of such termination of
employment.
provided, however, that, if before the third anniversary of
the Closing, RandH Germany reaches an amicable termination
agreement with any of the German Geschaftsfuhrer pursuant to
which such Geschaftsfuhrer receives, in lieu of severance, in
whole or in part, some other form of compensation or benefit,
then the Ferro Sellers will contribute to such alternate form
of compensation or benefit a sum equal to the present value of
any amount for which the Ferro Sellers otherwise would have
been responsible under the provisions of this Section 8.1(G).
(4) The Ferro Sellers will pay over to RandH Germany an amount
equal to pension obligation to which the German
Geschaftsfuhrer are entitled as of the Closing, which amount
will be determined as follows:
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(a) The Ferro Sellers will calculate in good faith the
amount of the German Geschaftsfuhrer pension obligation
on this basis set forth in Section 8.1(E)(3) above.
(b) The RandH Buyers will then review the Ferro Sellers
calculation of German Geschaftsfuhrer pension obligation
within 60 days after the Ferro Sellers deliver such
calculations to the RandH Buyers, together with all
relevant information supporting the Ferro Sellers'
calculation.
(c) The parties will then seek to resolve amicably any
difference in valuation results within 30 days.
(d) If the parties cannot resolve such differences within
such 30-day period, then either party will have the
right to initiate the dispute resolution process set
forth in Article 10 to resolve such dispute, in which
case the dispute will be finally resolved as provided in
Article 10.
(e) The Ferro Sellers will promptly pay over to the RandH
Buyers any amount for which the Ferro Sellers are or are
found to be responsible under this Section 8.1(G)(4).
The Ferro Sellers' duties and obligations arising out of the foregoing
provisions of this Section 8.1 are the "Ferro Sellers' Employee
Obligations." The RandH Buyers' duties and obligations arising out the
foregoing provisions of this Section 8.1 are the "RandH Buyers' Employee
Obligations."
8.2 ENVIRONMENTAL OBLIGATIONS. The parties' respective obligations with
respect to Environmental Matters will be as follows:
(A) PRE-CLOSING ENVIRONMENTAL MATTERS. The Ferro Sellers will be solely
responsible for any Environmental Loss with respect to the Real
Property or the Acquired Assets if such Environmental Loss resulted
solely from by actions or omissions occurring prior to or conditions
existing as of the Closing.
(B) THE RANDH BUYERS' OPERATIONS AFTER CLOSING. After Closing, the RandH
Buyers will conduct its operations at the Facilities only in full
compliance with all Environmental Laws. Without limiting the
foregoing,
(1) The RandH Buyers will promptly inform the relevant site
landlord of any release, emission, leak, discharge or other
event that could be reasonably expected to create or
exacerbate any Environmental Liability at the relevant
Facility and will consult with site landlord regarding, and be
solely responsible for performing, any remediation which may
be necessary to ensure that such impact does not occur;
(2) The RandH Buyers will afford representatives of the Ferro
Sellers' at least 60 days' prior notice of and a full
opportunity to observe any environmental, health, and/or
safety audits of the RandH Buyers' operations at the
Facilities that the RandH Buyers may conduct in the ordinary
course of business after the Closing;
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(3) Representatives of the relevant site landlord and the Ferro
Sellers will also be entitled to observe the conduct of any
remediation carried out pursuant to the provisions of this
Section 8.2(B); and
(4) On request of the Ferro Sellers (such request to be made not
more than once in each calendar year), the appropriate RandH
Buyer will provide the Ferro Sellers with a certification of
compliance with the provisions of this Section 8.2(B).
If with respect to any Facility, the relevant RandH Buyer shall have
complied with its obligations under this Section 8.2(B), then such
RandH Buyer will be entitled to a rebuttable presumption that its
operations at the Facility have not contributed any contamination to
any existing environmental condition at such Facility, in which case
the RandH Buyer will have no responsibility to contribute to or
undertake any remediation with respect to such Facility.
(C) REMEDIATION.
(1) The Ferro Sellers will have sole authority for managing any
necessary environmental remediation on the Real Property at
the Facilities and the RandH Buyers hereby grant the Ferro
Sellers such access to the Facilities as may reasonably be
required to carry out such remediation. The Ferro Sellers will
use all reasonable measures to avoid unreasonable interference
with the RandH Buyers' operations in the design and
implementation of any such environmental remediation.
(2) If, with respect to any Facility, the Ferro Sellers rebut the
presumption contained in Section 8.2(B) above or otherwise
prove that any RandH Buyer or any of the RandH Buyers'
Affiliates failed to comply with their respective obligations
under Section 8.2(B) above, then the RandH Buyers will be
responsible for reimbursing the Ferro Sellers for a portion of
the remediation costs incurred at such Facility determined by
multiplying such remediation costs by a fraction -
(a) The numerator of which is quantity of the relevant
contaminant that the Ferro Sellers can prove was caused
by the RandH Buyers or their Affiliates after the
Closing, and
(b) The denominator of which is the total amount of such
contaminant, which is present in the environmental media
to be remediated,
and the Ferro Sellers will be solely responsible for the
balance of such costs.
(3) If the Ferro Sellers cannot rebut the presumption contained in
Section 8.2(B) or otherwise prove that the RandH Buyers or any
of the RandH Buyers Affiliates failed to comply with their
obligations under Section 8.2(B) above, then the Ferro Sellers
will be solely responsible for paying the cost of any
necessary environmental remediation at the Facility.
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For purposes of this Section 8.2(C), remediation costs include only
such costs that are actually incurred by the relevant Ferro Seller
and that are reasonably necessary in order to remediate the
identified environmental condition to publicly-available or
routinely-applied remediation standards, guidelines or policies,
regulations, ordinances or other requirements of Environmental Laws
imposed by applicable Governmental Authority with jurisdiction,
consistent with the current use of the property, or those
specifically required by a Governmental Authority.
(D) SPANISH PERMITS. With respect to the possible need for a new or
amended general municipal start-up permit and/or a waste water
permit covering Ferro Spain's powder coatings operations -
(1) The Ferro Sellers will have sole responsibility for the
prosecution of any applications for such permits and for
negotiating with local authorities in respect of such
applications in a manner that ensures that the RandH Buyers
will, at all times, have the necessary authorization to
conduct the powder coatings operations in full compliance with
the law, and provided that the Ferro Sellers keep the RandH
Buyers fully apprised of such applications and negotiations;
(2) The Ferro Sellers will be solely responsible for designing and
implementing any remedial actions, including changes in the
physical structure of the Spanish Facility, that may be
necessary in order to obtain such permits or otherwise enable
the RandH Buyers to operate the Powder Coatings Business
without violating Spanish Enviromental Laws, provided that (i)
the Ferro Sellers will cooperate fully with the RandH Buyers
to assure that any such remedial plans are undertaken in such
a manner as to minimize disruption of the RandH Buyers'
operations, and (ii) any such remedial action proposed by the
Ferro Sellers may not materially adversely impact the costs of
operating the powder coatings business at the Spanish
Facility; and
(3) The RandH Buyers will cooperate fully with the Ferro Sellers
in carrying out any such remedial actions in the most
practicable and economic fashion reasonably available.
The Ferro Sellers' duties and obligations arising out of the foregoing
provisions of this Section 8.2 are the "Ferro Sellers' Environmental
Obligations." The RandH Buyers' duties and obligations arising out of the
foregoing provisions of this Section 8.2 are the "RandH Buyers'
Environmental Obligations."
8.3 HEALTH AND SAFETY OBLIGATIONS. The parties' respective obligations with
respect to Health and Safety Matters will be as follows:
(A) NOTICE TO THE FERRO SELLERS. The RandH Buyers will promptly inform
the Ferro Sellers if, after the Closing, any Transferred Employee
alleges or claims that he or she suffers from an occupational
disease as a result of exposure to hazardous substances during his
employment with the Ferro Sellers or the RandH Buyers (or any of
their respective Affiliates).
(B) JOINT INVESTIGATION. If the RandH Buyers give the Ferro Sellers
notice of an allegation or claim of a Transferred Employee pursuant
to Section 8.3(A), then
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the parties will jointly investigate such allegation or claim and endeavor
to determine the substance or substances which may or is alleged to have
caused or contributed to that condition.
(C) PARTIES' RESPONSIBILITIES. If either the RandH Buyers or the Ferro
Sellers (or any Affiliate of any of the foregoing) are found liable
under relevant Health and Safety Laws to a Transferred Employee a
result of an occupational disease, then the RandH Buyers and the
Ferro Sellers will share such liability as follows:
(1) If a relevant tribunal (or other regulatory or administrative
body which has assessed liability in the relevant case) has
made a final and binding determination that a specific agent
has caused the occupational disease (the "Causative Agent")
and the parties can with reasonable accuracy assign an
exposure rating reflecting the relative exposure of the
Transferred Employee to the Causative Agent before and after
the Closing, then the RandH Buyers will pay the entire
resulting Health and Safety Liability, but the Ferro Sellers
will reimburse the RandH Buyers (or their Affiliate) for such
portion of the Health and Safety Liability as bears the same
proportion to the total Health and Safety Liability as the
exposure rating of the Transferred Employee to the Causative
Agent for the period before the Closing bears to such
Transferred Employee's total exposure rating to such Causative
Agent.
(2) If a relevant tribunal (or other regulatory or administrative
body which has assessed liability in the relevant case) makes
a final and binding determination as to a Causative Agent, but
it is not possible with reasonable accuracy to assign an
exposure rating reflecting the relative exposure of the
Transferred Employee to the Causative Agent before and after
the Closing, then:
(a) If either party can prove the Transferred Employee was
not exposed to the Causative Agent during his employment
with that party but was exposed to the Causative Agent
during his or her employment with the other party, then
such other party will be solely responsible for such
Health and Safety Liability; or
(b) Otherwise, the RandH Buyers will pay the entire
resulting Health and Safety Liability, but the Ferro
Sellers will reimburse the RandH Buyers (or their
Affiliate) for such portion of the Health and Safety
Liability equal to a fraction, the numerator of which is
the number of days the Transferred Employee worked in
the operation where he or she was exposed to the
Causative Agent on or before the Closing Date, and the
denominator of which is the entire number of days the
Transferred Employee worked in such operation.
(3) If the relevant tribunal (or other regulatory or
administrative body which has assessed liability in the
relevant case) makes no final and binding determination as to
the Causative Agent, and the Transferred Employee worked at
the Facility in question both before and after the Closing,
then the RandH Buyers will pay the entire resulting Health and
Safety Liability, but the Ferro Sellers will reimburse the
RandH Buyers (or their Affiliate)
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for such portion of the Health and Safety Liability equal to a
fraction, the numerator of which is the number of days the
Transferred Employee worked in the Powder Coatings Business on
or before the Closing Date, and the denominator of which is
the entire number of days the Transferred Employee worked in
the Powder Coatings Business.
The Ferro Sellers' duties and obligations arising out of the foregoing
provisions of this Section 8.3 are the "Ferro Sellers' Health and Safety
Obligations." The RandH Buyers' duties and obligations arising out the
foregoing provisions of this Section 8.3 are the "RandH Buyers' Health and
Safety Obligations."
8.4 PRODUCT WARRANTY OBLIGATIONS. The parties respective obligations with
respect to claims that Products sold by the Ferro Sellers' are or were
defective will be as follows:
(A) PRODUCT WARRANTY CLAIMS. If after the Closing a claim ("Product
Warranty Claim") is made by a purchaser or user of a Product which
was sold by any Ferro Seller (or any Affiliate of a Ferro Seller)
before the Closing that such product was defective, including any
claim that such Product failed to meet any express or implied
warranties or manufacturing specifications, then the RandH Buyers
will promptly give the Ferro Sellers written notice of such claim.
(B) PROCESSING OF PRODUCT WARRANTY CLAIMS. The RandH Buyers will be
solely responsible for the processing of Product Warranty Claims,
including having the full authority to settle, compromise, or deny
any such Product Warranty Claim on such terms as the RandH Buyers
may determine. The RandH Buyers will, however, provide the Ferro
Sellers with full access to the allegedly defective Product and
promptly provide the Ferro Sellers with copies of all relevant
correspondence, tests, reports, analyses, and studies relating to
such Product Warranty Claim.
(C) NOTICE OF PROPOSED SETTLEMENT. If the RandH Buyers decide to settle
any Product Warranty Claim, then the RandH Buyers will give the
Ferro Sellers written notice of such decision. Such notice will
provide the Ferro Sellers with (1) full particulars of the Product
Warranty Claim, (2) the basis for the RandH Buyers' decision, (3)
the payment or credit which the RandH Buyers propose to offer in
settlement thereof, and (4) any amount which the RandH Buyers
believe they are entitled to recover from the Ferro Sellers or to
credit against the RandH Product Warranty Deductible (as defined in
Section 8.4(E)(1) below) as a result of such proposed settlement.
(D) DISPUTES. If the Ferro Sellers dispute a Product Warranty Claim or
the Ferro Sellers' liability for such Product Warranty Claim, then
the Ferro Sellers will give the RandH Buyers written notice of such
dispute within 45 business days after receipt of the notice referred
to in Section 8.4(C). If the Ferro Sellers fail to provide such
notice within such period, then the Ferro Sellers will be deemed to
have consented to such settlement and to have accepted any
responsibility of the Ferro Sellers to contribute to such settlement
or to any reduction in the RandH Product Warranty Deductible. The
Ferro Sellers will state with particularity in any such dispute
notice the basis for the Ferro Sellers objection to the proposed
settlement and will provide the RandH Buyers a statement of the
amount (if any) that the Ferro Sellers believe to be a reasonable
settlement amount. In such case, if the parties cannot reach
agreement within 30 days after
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the RandH Buyers receive such dispute notice, then either party will
have the right to initiate the dispute resolution process set forth
in Article 10 to resolve such dispute, in which case the dispute
will be finally resolved as provided in Article 10. The initiation
of such dispute process shall not affect the RandH Buyer's right to
proceed without prejudice to either party with the settlement as
proposed in the notice provided in Section 8.4(C) above.
(E) PARTIES' RESPONSIBILITIES. The parties' respective obligations with
respect to payments of Product Warranty Claims will be as follows:
(1) The RandH Buyers will be responsible for the first $150,000 of
Product Warranty Claims (the "RandH Product Warranty
Deductible"),
(2) In determining the amount of any settlement to be credited
against the RandH Product Warranty Deductible -
(a) In the case of a settlement effected through the
replacement of defective product or the issuance of a
credit note, the value of such portion of the settlement
shall be deemed to be the standard manufacturing cost of
the replacement product or any product furnished in
satisfaction of the credit note, and
(b) In the case of a settlement effected through the payment
of cash, the value of settlement will be the lesser of
(i) the amount paid and (ii) the amount the RandH Buyer
was legally obligated to pay, giving effect to any
legally enforceable limitation of remedy that may exist
in favor of the RandH Buyers and/or the Ferro Sellers.
In no event will the Ferro Sellers' obligation with respect to
a Product Warranty Obligation exceed the amount that the RandH
Buyer is legally obligated to pay, giving effect to any
legally enforceable limitation of remedy that may exist in
favor of the RandH Buyers and/or the Ferro Sellers.
The Ferro Sellers' duties and obligations arising out of the foregoing
provisions of this Section 8.4 are the "Ferro Sellers' Product Warranty
Obligations." The RandH Buyers' duties and obligations arising out the
foregoing provisions of this Section 8.4 are the "RandH Buyers' Product
Warranty Obligations."
8.5 THE RANDH BUYERS' SOLE REMEDY. The RandH Buyers acknowledge that, absent
actual fraud on the part of the Ferro Sellers, the RandH Buyers' right of
indemnity under Section 9.2(C) for nonperformance of the Ferro Sellers'
Employee Obligations, the Ferro Sellers' Environmental Obligations, the
Ferro Seller's Health and Safety Obligations, and the Ferro Sellers'
Product Warranty Obligations is the RandH Buyers' sole and exclusive
remedy with respect thereto and the RandH Buyers hereby waive any other or
further rights of recovery the RandH Buyers might otherwise have against
the Ferro Sellers with respect to such matters on grounds of
misrepresentation or breach of warranty, breach of covenant, or otherwise.
The RandH Buyers also hereby release and discharge the Ferro Sellers from
any other claims that the RandH Buyers may now or hereafter have against
the Ferro Sellers for an Environmental Loss.
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ARTICLE 9 - INDEMNIFICATION
9.1 INDEMNIFICATION OF THE FERRO SELLERS. The RandH Buyers will indemnify and
(in the case of third-party claims) defend the Ferro Sellers, and hold the
Ferro Sellers harmless, from and against the Actual Amount of any and all
liabilities, damages, claims, costs, and expenses (including reasonable
attorneys' fees) arising out of or resulting from --
(A) Any misrepresentation or breach of warranty by RandH under Section
7.3; or
(B) Nonperformance by the RandH Buyers of any obligations to be
performed by or on the part of the RandH Buyers under this Purchase
Agreement, including the RandH Buyers' obligations with respect to
the Assumed Liabilities and the RandH Buyers' obligations under
Article 8.
9.2 INDEMNIFICATION OF THE RANDH BUYERS. Subject to the limitations set forth
in Section 9.4 and 9.5, the Ferro Sellers jointly and severally will
indemnify and (in the case of third-party claims) defend the RandH Buyers,
and hold the RandH Buyers harmless, from and against the Actual Amount of
any and all liabilities, damages, claims, costs, and expenses (including
reasonable attorneys' fees) arising out of or resulting from -
(A) Any misrepresentation or breach of warranty by the Ferro Sellers
under Section 7.1;
(B) Any misrepresentation or breach of warranty by the Ferro Sellers
under Section 7.2, or in any other instrument, certificate or
document delivered by the Ferro Sellers at Closing, for which notice
is given by the RandH Buyers within the period specified in Section
9.6; or
(C) Nonperformance by the Ferro Sellers of any obligation to be
performed by or on the part of the Ferro Sellers under this Purchase
Agreement, or under any other instrument or document delivered by
the Ferro Sellers at Closing, including the Ferro Sellers'
obligations with respect to the Retained Liabilities and the Ferro
Sellers' obligations under Article 8.
9.3 CLAIMS. If either party desires to make a claim against the other under
Section 9.1 or 9.2 which does not involve a claim by any third-party, then
such party shall make such claim by delivering written notice to the other
within a reasonable period of time. If either the RandH Buyers or the
Ferro Sellers (the "Claimant") desires to make a claim against the other
(the "Indemnitor") under Section 9.1 or 9.2 which involves a claim by a
third-party, then such claim will be made in the following manner and be
subject to the following terms and conditions:
(A) NOTICE. The Claimant will give notice to the Indemnitor within a
reasonable period of time of any demand, claim, or threat of
litigation or the actual institution of any action, suit, or
proceeding (collectively, a "Claim") at any time served on or
instituted against the Claimant with respect to which the Claimant
believes it would have a right of indemnification under Section 9.1
or 9.2; provided, however that any failure to provide such notice
shall not relieve the Indemnitor of any indemnity obligation for
which it otherwise would have been responsible except to the extent
the Indemnitor is actually prejudiced by such failure. In providing
such notice, the Claimant shall only state the existence of such
Claim and shall not admit or deny the validity of the facts or
circumstances out of which such
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Claim arose. Solely for purposes of determining whether the Claimant
is entitled to indemnification under Section 9.1 or 9.2, the alleged
facts or circumstances on which such Claim is based shall be treated
as if they were true pending final resolution of the facts and
circumstances out of which such Claim arose.
(B) RESPONSIBILITY FOR DEFENSE. Within 30 days after receipt of any such
notice, but not less than five business days before the time the
Claimant is required to respond to a Claim, the Indemnitor will
(except in the case of Product Warranty Claims, which are covered
separately in Section 8.4) by giving written notice to the Claimant,
have the right to assume responsibility for the defense of the Claim
in the name of the Claimant or otherwise as the Indemnitor may
elect; provided that the Indemnitor also agrees that it does or
might have responsibility to indemnify the Claimant with respect to
such Claim and provided further that, in any case involving the
joint defense of the Claimant and Indemnitor, such joint defense
would not result in a conflict of interest by defending counsel.
Otherwise, the Claimant will have responsibility for the defense of
the Claim. Subject to the provisions of subsections 9.3(C) and (D)
below, the party having responsibility for defense of a Claim (the
"Defending Party") will have the full authority to defend, cure,
adjust, compromise, or settle such Claim or appeal any judgment or
ruling of a court or other tribunal in connection with such Claim in
its own name and/or in the name of the other party.
(C) RIGHT TO PARTICIPATE. Notwithstanding a Defending Party's
responsibility for the defense of a Claim, the other party shall
have the right to participate, at its own expense and with its own
counsel, in the defense of a Claim and the Defending Party will
consult with the other party from time to time on matters relating
to the defense of such Claim. The Defending Party will provide the
other party with copies of all pleadings and material correspondence
relating to such Claim.
(D) SETTLEMENT. A Defending Party will provide the other party with
timely written notice of any proposed adjustment, compromise, or
other settlement, including equitable or injunctive relief, of a
Claim which the Defending Party intends to propose or accept. If the
other party fails to provide the Defending Party with timely written
notice of objection to such settlement, then the Defending Party
shall have the authority to propose or accept such settlement and
enter into any agreement, in its own name and/or in the name of the
other party, giving legal effect to all aspects of such settlement.
If the other party objects to such settlement, then the Defending
Party may, if it so elects, tender the defense to the other party by
paying to such other party the amount of money proposed to be paid
in settlement of the Claim, in which case the Defending Party shall
have no further liability to the other party under this Purchase
Agreement with respect to such Claim and the other party shall have
full authority for the future defense of such Claim and full
responsibility for any and all liabilities, obligations, costs, and
expenses resulting therefrom.
9.4 DISPUTED RESPONSIBILITY. If, after receiving a written indemnification
notice under Section 9.3(A), the Indemnitor disputes --
(A) The fact that the Indemnitor in fact made a misrepresentation or
breach a warranty under this Purchase Agreement giving rise to the
claim to which the notice relates or that any such misrepresentation
or breach in fact gave rise to
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the liabilities, damages, claims, costs, or expenses for which the
Claimant seeks indemnification under this Article 9, or
(B) The fact that the Indemnitor failed to perform any obligation to be
performed on the part of the Indemnitor under this Purchase
Agreement giving rise to the claim to which the notice relates or
that any such failure in fact gave rise to the liabilities, damages,
claims, costs, or expenses for which the Claimant seeks
indemnification under this Article 9,
then the Indemnitor will have the right to initiate the dispute resolution
mechanism set forth in Article 10, in which case the dispute will be
finally resolved as provided in Article 10. In such case, however, pending
final resolution of the disputed item, the parties will proceed as if the
Indemnitor had in fact made a misrepresentation, breached a warranty, or
failed to perform an obligation to be performed on the part of that party
under this Purchase Agreement and as if such act or failure in fact gave
rise to the liabilities, damages, claims, costs, or expenses for which the
Claimant seeks indemnification under this Article 9. If the disputed item
is resolved in whole or in part in favor of the Indemnitor, then the
Indemnitor will be entitled to an equitable reimbursement from the
Claimant of any amounts expended or incurred in carrying out the
Indemnitor's indemnification obligations under this Article 9.
9.5 QUANTUM LIMITATION ON INDEMNIFICATION.
(A) Notwithstanding the provisions of Section 9.2(B), the Ferro Sellers
will not be obligated to indemnify or defend the RandH Buyers, or
hold the RandH Buyers harmless, from or against any liability,
damage, claim, cost, or expense (including attorneys' fees) arising
out of a misrepresentation or breach of warranty by the Ferro
Sellers pursuant to Section 9.2(B) unless the Actual Amount of all
claims exceeds $1,000,000, and then only to the extent of such
excess. In no event will the Ferro Sellers' total obligation to the
RandH Buyers under Section 9.2(B) exceed, in the aggregate,
$20,000,000.
(B) The RandH Buyers will not be obligated to indemnify or defend the
Ferro Sellers, or hold the Ferro Sellers harmless, from or against
any liability, damage, claim, cost, or expense (including attorneys'
fees) arising out of a misrepresentation or breach of warranty by
the RandH Buyers pursuant to Section 9.1(A) unless the Actual Amount
of all claims exceeds $1,000,000, and then only to the extent of
such excess. In no event will the RandH Buyers' total obligation to
the Ferro Sellers under Section 9.1(A) exceed, in the aggregate,
$20,000,000.
9.6 TIME LIMITATION ON INDEMNIFICATION. Notwithstanding the provisions of
Section 9.2(B), the Ferro Sellers will not be obligated to indemnify or
defend the RandH Buyers, or hold the RandH Buyers harmless, from or
against any liability, damage, claim, cost, or expense (including
attorneys' fees) arising out of a misrepresentation or breach of warranty
by the Ferro Sellers pursuant to Section 9.2(B), and any cause of action
based thereupon shall expire and terminate, unless the RandH Buyers
delivers to the Ferro Sellers notice and a full explanation of the alleged
breach on or before 5:00 p.m. (Eastern Time) -
(A) In the case of claims by the RandH Buyers for misrepresentations or
breaches of warranty of the Ferro Sellers' tax warranties under
Section 7.2(P), 90 days after
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expiration of the applicable statute of limitation period with
respect to the particular tax at issue; and
(B) In the case of any other claim, the second anniversary of the
Closing Date.
9.7 ACTUAL AMOUNT. For purposes of the parties' respective obligations under
Sections 8.2, 9.1 and 9.2, in computing the "Actual Amount" of any
liability, damage, claim, loss, cost, or expense, the following principles
will apply:
(A) The amount will be reduced to give full effect to any provision or
reserve on the books of the Powder Coatings Business as of the
Closing with respect to the particular item or category of items out
of which the misrepresentation, breach, or nonperformance in
question arose;
(B) The amount will be reduced to give full effect to any insurance
recoveries the indemnified party receives under insurance policies
as a consequence of the fact, condition, or circumstance giving rise
to the misrepresentation, breach, or nonperformance in question;
(C) The amount will be reduced to give full effect to any indemnity,
contractual, or noncontractual recoveries the indemnified party
receives as a consequence of the fact, condition, or circumstance
giving rise to the misrepresentation, breach, or nonperformance in
question;
(D) The amount will be reduced to give full effect to any act or
omission of the indemnified party that either was the cause of or
increased the ultimate amount of any liability, damage, claim, loss,
cost, or expense incurred by the indemnified party;
(E) The amount will be reduced to give full effect to any failure by an
indemnified party to take reasonable efforts to mitigate any
liability, damage, claim, loss, cost, or expense incurred by such
indemnified party;
(F) In addition, for purposes of determining whether a breach of a
representation or warranty has occurred, and in computing the Actual
Amount of a party's liability for such breach, any materiality or
similar limitation on such representation or warranty will be
disregarded; and
(G) With respect to any Claim for a misrepresentation or breach of
warranty under Section 7.2(H)(7), the Actual Amount will include 80%
of such liabilities, damages, claims, costs, and expenses, which
amount will have been first reduced to give full effect to any
failure by the RandH Buyers to mitigate any such liabilities,
damages, claims, costs, or expenses (less any amount that would have
had to be incurred to effect such mitigation) by taking reasonable
commercial steps, including changing Product formulations, designs,
or production processes, to avoid or minimize infringement of
third-party patent rights.
9.8 EXCLUSIVE REMEDIES. The remedies provided in this Article 9 will be the
parties' exclusive remedies for claims arising out of or resulting from
any misrepresentation,
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breach of warranty, breach of covenant, breach of undertaking, or
nonperformance of any obligation to be performed on the part of any party
under this Purchase Agreement.
9.9 INDEMNITY PAYMENTS AS ADJUSTMENTS. All indemnity payments under this
Article 9 will constitute and be treated as adjustments to the Purchase
Price.
ARTICLE 10 - DISPUTE RESOLUTION
If the parties ever have a dispute involving their respective rights and
obligations under this Purchase Agreement or any of the Other Agreements (other
than with respect to the determination of the amount of the Adjustment), then
the parties will resolve such dispute as follows:
10.1 DISPUTE NOTICE. Either the RandH Buyers or the Ferro Sellers may at any
time deliver to the other a written dispute notice setting forth a brief
description of the issues for which such notice initiates the dispute
resolution mechanism set forth in this Article 10. Such dispute notice
shall also specify the provision or provisions of this Purchase Agreement
and the facts or circumstances that are the subject matter of the dispute.
10.2 INFORMAL NEGOTIATIONS. During the 60-day period following delivery of a
dispute notice described in Section 10.1, the parties will cause their
representatives to meet and seek to resolve the disputed items cordially
through informal negotiations
10.3 DISPUTE RESOLUTION PROCEEDINGS. If representatives of the parties are
unable to resolve disputed items through the informal negotiations
described in Section 10.3, then within 30 days after the informal
negotiation period the parties will refer the disputed issues to a dispute
resolution panel for final resolution as follows:
(A) DESIGNATION OF REPRESENTATIVES. Within seven days after such
informal negotiation period, the RandH Buyers and the Ferro Sellers
will each designate one representative to serve on the dispute
resolution panel. (If either party fails or refuses to designate a
representative, then the other party will be entitled to have a
representative appointed for such party by the CPR Institute.)
(B) SELECTION OF NEUTRAL. Promptly after they have been designated, the
designated representatives will meet and select a neutral
third-party (the "Neutral") to serve as the third member of the
dispute resolution panel. If the designated representatives of
parties cannot agree on a Neutral, then either representative may
request the CPR Institute to select the Neutral.
(C) PROCEDURES AND PROCESS. At the time the matter is referred to the
dispute resolution panel, the RandH Buyers and the Ferro Sellers
will jointly establish the procedures to be followed with respect to
the presentation of the parties' respective positions and the
process by which the dispute resolution panel will reach and render
its decision on the disputed issues. Such procedures and processes
will, at a minimum, assure that -
(a) Each party will have the right to submit evidence to the
dispute resolution panel,
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(b) Each party will have the right to present a written statement
concerning that party's position with respect to the disputed
item, and
(c) Before reaching a decision concerning the disputed item, the
dispute resolution panel will convene a hearing at which the
parties may be represented.
If the RandH Buyers and the Ferro Sellers cannot agree on such
procedures and processes, then the Neutral will establish such
procedures and process that will, in all events, be consistent with
the foregoing.
(D) DECISION. The dispute resolution panel will act by majority vote.
The dispute resolution panel will base its decision on applicable
provisions of this Purchase Agreement or, if the provisions of this
Purchase Agreement do not resolve the matter, on general principles
of substantive Ohio law. (The dispute resolution panel may, if it so
desires, seek the opinion of an attorney licensed to practice law in
the State of Ohio on any matter of substantive Ohio law on which the
panel desires clarification.)
10.4 EQUITABLE RELIEF. Notwithstanding any other provision of this Article 10,
either party may seek from a court of competent jurisdiction interim
injunctive relief in order to maintain the status quo or protect such
party's rights under this Purchase Agreement pending resolution of a
dispute pursuant to this Article 10.
10.5 BINDING EFFECT. The decisions of the dispute resolution panel under this
Article 10 will be binding on the Ferro Sellers and the RandH Buyers and
will be neither appealable, contestable, or subject to collateral attack
by the Ferro Sellers or the RandH Buyers.
ARTICLE 11 - AMENDMENT, WAIVER, AND TERMINATION
11.1 AMENDMENT. The parties may amend this Purchase Agreement at any time
before the Closing, but only by written instrument executed by both
parties.
11.2 WAIVER. Either party may at any time waive compliance by the other with
any undertakes or conditions contained in this Purchase Agreement but only
by written instrument executed by the party waiving such compliance. No
such waiver, however, shall be deemed to constitute the waiver of any such
undertaking or condition in any other circumstance or the waiver of any
other undertaking or condition.
11.3 TERMINATION. The parties may terminate this Purchase Agreement by mutual
consent at any time before the Closing, but only by written instrument
signed by both parties. Either party may terminate this Purchase Agreement
if the Closing has not occurred within 120 days following the execution of
this Purchase Agreement; provided that the party so terminating has not,
through its own action or inaction, caused such delay.
ARTICLE 12 - MISCELLANEOUS
12.1 COOPERATION. The RandH Buyers and the Ferro Sellers will cooperate with
the other party(ies), at the other party's(ies') request and expense, in
furnishing information, testimony, and other assistance in connection with
any actions, proceedings, arrangements, and disputes with other
third-parties or governmental inquiries or
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investigations involving the Ferro Sellers' conduct of the Powder Coatings
Business or the transactions contemplated by this Purchase Agreement.
12.2 SEVERABILITY. If any provision of this Purchase Agreement shall finally be
determined to be unlawful, then such provision will be deemed to be
severed from this Purchase Agreement and replaced by a lawful provision
which carries out, as closely as possible, the intention of the parties
and preserves the economic bargain contemplated by this Purchase Agreement
and, in such case, each and every other provision of this Purchase
Agreement will remain in full force and effect.
12.3 COSTS AND EXPENSES. The parties will be responsible for the following
costs and expenses arising out of the transactions contemplated by this
Purchase Agreement as follows:
(A) The Ferro Sellers will be solely responsible for the fees and
expenses of Xxxxxxx Xxxxx Xxxxxx Inc. whether or not the
transactions are consummated;
(B) The RandH Buyers will be solely responsible for any filing fees that
may be required in connection with any necessary regulatory
applications and notifications; and
(C) If the transactions are consummated, the RandH Buyers, on one hand,
and the Ferro Sellers, on the other hand, will each bear one-half
(1/2) the cost of any registration fees, stamp duties, or other
transfer fees, taxes or imposts, if any, which arise out of or
result from the transfer (or the perfection of the transfer) of the
Acquired Assets from the Ferro Sellers to the RandH Buyers.
Otherwise, each party will bear its own expenses incurred in connection
with this Purchase Agreement and the transactions contemplated by this
Purchase Agreement, whether or not the transactions are consummated.
12.4 NOTICES. All notices, requests and other communications under this
Purchase Agreement shall be in writing and shall be deemed to have been
duly given at the time of receipt if delivered by hand or communicated by
electronic transmission, or, if mailed, three (3) days after mailing
registered or certified mail, return receipt requested, with postage
prepaid:
If to the RandH Buyers, to: Rohm and Xxxx Company
000 Xxxxxxxxxxxx Xxxx Xxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Secretary
Telefax: 0.000.000.0000
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If to the Ferro Sellers, to: Ferro Corporation
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
XXX
Attention: General Counsel
Telefax: 0.000.000.0000
Either party may change its notice address above to a different address by
giving the other party written notice of such change.
12.5 ASSIGNMENT AND APPOINTMENT. This Purchase Agreement will be binding upon
and inure to the benefit of the successors of the parties, but will not be
assignable by any party without the prior written consent of the other
parties. The RandH Buyers other than RandH hereby irrevocably appoint
RandH as their agent for purposes of this Purchase Agreement and grant
RandH the power to enter into any further agreement or agreements in their
names and on their behalf that RandH may deem necessary or appropriate for
the orderly administration of this Purchase Agreement. Ferro Spain, Ferro
UK, RPL Germany, and RP Sweden hereby irrevocably appoint Ferro as their
agent for purposes of this Purchase Agreement and xxxxx Xxxxx the power to
enter into any further agreement or agreements in their names and on their
behalf that Ferro may deem necessary or appropriate for the orderly
administration of this Purchase Agreement.
12.6 NO THIRD PARTIES. Neither this Purchase Agreement nor any provisions set
forth in this Purchase Agreement is intended to, or shall, create any
rights in or confer any benefits upon any third-party.
12.7 INCORPORATION BY REFERENCE. The Appendices to this Purchase Agreement and
the Disclosure Package constitute integral parts of this Purchase
Agreement and are hereby incorporated into this Purchase Agreement by this
reference.
12.8 GOVERNING LAW. This Purchase Agreement will be governed by and construed
in accordance with the internal substantive laws of State of Ohio, except
where the internal substantive laws of another jurisdiction mandatorily
apply.
12.9 BULK SALES. The RandH Buyers hereby waive compliance by the Ferro Sellers
with the provisions of any so-called "bulk sales" law or similar law
requiring creditor notice of any jurisdiction.
12.10 COUNTERPARTS. The parties may execute more than one counterpart of this
Purchase Agreement hereto, and each fully executed counterpart shall be
deemed an original without production of the others.
12.11 COMPLETE AGREEMENT. This Purchase Agreement sets forth the entire
understanding of the parties hereto with respect to the subject matter of
this Purchase Agreement and supersedes all prior letters of intent,
agreements, undertakes, arrangements, communications, representations, or
warranties, whether oral or written, by any officer, employee, or
representative of either party relating thereto.
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To evidence their agreement as stated above, ROHM AND XXXX COMPANY, on one
hand, and FERRO CORPORATION, FERRO SPAIN S.A., FERRO (GREAT BRITAIN) LTD.,
RUHR-PULVERLACK GMBH, and XXXXX-XXXX-XXXXXX NORDISKA AB, on the other hand, have
each caused their respective duly authorized directors, officers, or attorneys
to execute this Asset Purchase Agreement as of August 2, 2002.
ROHM AND XXXX COMPANY FERRO CORPORATION
By: /s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxxxxxx X. Xxxxx
------------------------------ -------------------------------------
Xxxxx X. Xxxxxxx Xxxxxxxxx X. Xxxxx
Vice President Vice President
Business Director,
Powder Coatings FERRO SPAIN S.A.
By: /s/ Xxxxxxxxx X. Xxxxx
-------------------------------------
Xxxxxxxxx X. Xxxxx
Director
FERRO (GREAT BRITAIN) LTD.
By: /s/ Xxxxx X. Xxxx
-------------------------------------
Xxxxx X. Xxxx
Attorney-in-Fact
RUHR-PULVERLACK GMBH
By: /s/ Xxxxxxxx Xxxxx
-------------------------------------
Xxxxxxxx Xxxxx
Geschaftsfuhrer
And /s/ Xxxxxx Xxxx
-------------------------------------
Xxxxxx Xxxx
Geschaftsfuhrer
XXXXX-XXXX-XXXXXX NORDISKA AB
By: /s/ Xxx Xxxxxxxxxxxx
-------------------------------------
Xxx Xxxxxxxxxxxx
Director
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Appendix A
DEFINITIONS
The following terms identified with initial capital letters are defined in
the following Sections of the Purchase Agreement:
TERM CROSS REFERENCE
Accounting Principles ............................................ Section 2.7(A)
Acquired Assets .................................................. Section 2.2
Actual Amount .................................................... Section 9.7
Adjustment........................................................ Section 2.7(G)
Xxxxxxxx Lease ................................................... Section 5.3(B)(1)
Xxxxxxxx Services Agreement ...................................... Section 5.3(B)(2)
Assumed Liabilities .............................................. Section 2.4
Base-Line Working Capital ........................................ Section 2.7(E)
Books of Account ................................................. Section 7.2(B)
Xxxxxxxxx Lease .................................................. Section 5.3(B)(3)
Xxxxxxxxx Services Agreement ..................................... Section 5.3(B)(4)
Causative Agent................................................... Section 8.4(C)
Claim ............................................................ Section 9.3(A)
Claimant ......................................................... Section 9.3
Closing Section 5.1
Closing Date ..................................................... Section 5.2
Closing Working Capital .......................................... Section 2.7(F)
Closing Time ..................................................... Section 5.2
Defending Party .................................................. Section 9.3(B)
Employees ........................................................ Section 8.1(A)
Excluded Employees ............................................... Section 8.1(A)
Ferro ............................................................ Preamble
Ferro Sellers..................................................... Preamble
Ferro Sellers' Employee Obligations .............................. Section 8.1
Ferro Sellers' Environmental Obligations ......................... Section 8.2
Ferro Sellers' Health and Safety Obligations .................... Section 8.3
Ferro Sellers Product Warranty Obligations ...................... Section 8.4
Ferro Spain ...................................................... Preamble
Ferro UK ......................................................... Preamble
German Employees ................................................. Section 8.1(A)(3)
German Geschaftsfuhrer ........................................... Section 8.1(A)
Indemnitor ....................................................... Section 9.3
IPI .............................................................. Section 4.2(J)
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Appendix A
Material Consents ................................................ Section 3.5
Neutral .......................................................... Section 10.3(B)
Noncompete Business .............................................. Section 6.4
Other Agreements ................................................. Section 5.3(B)
Other Employees .................................................. Section 8.1(A)(4)
Powder Coatings Business ......................................... Recital A
Powder Coatings Disclosure Package ............................... Section 7.2
Powder Coatings Management ....................................... Section 7.4(B)
Preliminary Working Capital Statement ............................ Section 2.7(A)
Products ........................................................ Recital A
Product Warranty Claim ........................................... Section 8.4(A)
Purchase Agreement ............................................... Preamble
Purchase Price ................................................... Section 2.6
RandH ............................................................ Preamble
RandH Buyers ..................................................... Recital C
RandH Buyers' Employee Obligations ............................... Section 8.1
RandH Buyers' Environmental Obligations .......................... Section 8.2
RandH Buyers' Health and Safety Obligations ..................... Section 8.3
RandH Buyers' Product Warranty Obligations ...................... Section 8.4
RandH Product Warranty Deductible ............................... Section 8.4(E)(1)
RandH Denmark .................................................... Recital B
RandH Germany .................................................... Recital B
RandH Spain ...................................................... Recital B
RandH UK ......................................................... Recital B
Retained Assets .................................................. Section 2.3
Retained Liabilities.............................................. Section 2.5
RPL Germany ...................................................... Preamble
RP Sweden ........................................................ Preamble
Senior Ferro Management .......................................... Section 7.4(A)
Shared Intellectual Property Projects ............................ Section 3.4
Spanish Employees ................................................ Section 8.1(A)(2)
Transferred Employees ............................................ Section 8.1(C)
Transferred Obligations .......................................... Section 8.1(E)(2)
UK Employees ..................................................... Section 8.1(A)(1)
VAMP License ..................................................... Section 5.3(B)(5)
In addition, the following terms have the meanings set forth below where
used in the Purchase Agreement and identified with initial capital letters:
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Appendix A
TERM MEANING
Acquired Intellectual Property All of the following:
(1) Those patents and patent applications (including
all renewals, extensions, modifications,
continuations, continuations in part, divisions,
re-examinations and re-issues thereof) listed in
Subparts H-1 and H-2 of the Powder Coatings
Disclosure Package;
(2) Those trade names, trademarks (whether or not
registered), service marks (whether or not
registered), and applications therefor listed in
Subparts H-3 and H-4 of the Powder Coatings
Disclosure Package;
(3) Those domain names, websites, and web pages listed
on Subpart H-5 of the Powder Coatings Disclosure
Package; and
(4) All rights held or used by the Ferro Sellers in
their conduct of the Powder Coatings Business
consisting of, conferred by or otherwise relating
to:
(A) Trade secrets, including know- how,
inventions, computerized data and
information, business records, files and
data, discoveries, formulae, production
outlines, product designs, manufacturing
information, processes and techniques,
testing and quality control processes and
techniques, drawings and customer lists,
and
(B) Copyrights, original works of authorship
and disclaimers of moral rights,
but (in the case of the items listed in part (4)
above) only to the extent such items or matters
are physically located at a Facility as of the
Closing.
Affiliate With respect to a party, any other entity controlling,
controlled by, or under common control with such party.
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Appendix A
TERM MEANING
Business Records Business books and records, including financial, operating,
inventory, legal, personnel, payroll, research and
development, regulatory and/or customer product
qualification and customer records and all sales and
promotional literature, correspondence, and records -
(1) Physically located at the German Facility, the
Spanish Facility, the Swedish Facility or the UK
Facility held or used by the Ferro Sellers in their
conduct of the Powder Coatings Business and
(2) Held or used by the Ferro Sellers and (but only to
the extent) pertaining to the Powder Coatings
Business, wherever located.
Cash Cash and cash equivalent items held by the Ferro Sellers as
of the Closing, including certificates of deposit, time
deposits, marketable securities, and the proceeds of
accounts receivable paid on or before the Closing Date,
held or used by the Ferro Sellers primarily in their
conduct of the Powder Coatings Business.
Contracts Collectively, the Purchase Contracts, the Sales Contracts,
and the Other Business Contracts.
CPR Institute CPR Institute for Dispute Resolution, 000 Xxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx.
Default An occurrence which constitutes a breach or default under
a contract, order, or other commitment, after the
expiration of any grace period provided without cure or
with respect to which a notice of breach has been served by
a third party and such breach is not cured or otherwise
resolved to the satisfaction of the third party before the
Closing.
Employee Benefit Arrangement Any scheme, arrangement, plan, policy or program (other
than State or statutory social security, unemployment
insurance, workers compensation or pension arrangement),
whether legally enforceable or not, whether formal or
informal, and whether oral or written, operated by any
Ferro Seller or in which any Ferro Seller providing for
benefits Employees, including -
(1) Retirement, early or part time retirement, death, or
disability plans and schemes;
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Appendix A
TERM MEANING
(2) Accidental death or dismemberment plans and schemes;
(3) Medical benefit plans and schemes;
(4) Termination indemnity payment plans and schemes;
(5) Profit sharing, stock bonuses, stock options, stock
purchases, incentive arrangements, deferred
compensation, savings, phantom shares, stock
appreciation rights, and share save plans and
schemes;
(6) Life, accident and health insurance, hospitalization
plans and schemes;
(7) Holiday, holiday bonus, vacation, severance pay,
sick pay plans and schemes;
(8) Leave, tuition refund, service awards, company car,
scholarship, relocation, sabbatical, bonus, bridge
pension, retirement indemnity plans and schemes; and
(9) Company car and other executive or employee fringe
benefit plans and schemes.
Encumbrance Any encumbrance or lien, including, without limitation, any
mortgage, judgment lien, materialman's lien, mechanic's
lien, security interest, encroachment, easement, or other
restriction.
Environmental Liabilities Any cost, damages, expense, liability, fine, penalty,
judgment, award, amount paid in settlement or any other
obligation or responsibility arising from or under any
Environmental Law, including those consisting of or
relating to:
(1) Any environmental matter or condition, including
on-site or off-site contamination;
(2) Any legal or administrative proceeding, claim,
demand or response, remedial or inspection cost or
expense arising under any Environmental Law;
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Appendix A
TERM MEANING
(3) Financial responsibility under any Environmental Law
for cleanup costs or corrective action, including
any cleanup, removal, containment or other
remediation or response actions required by any
Environmental Law and for any natural resource
damages;
(4) Any chemical registration or product approval under
food and drug laws; or
(5) Any other compliance, corrective, or remedial
measure required under any Environmental Law.
Environmental Laws Laws, regulations, orders, decrees, standards, ordinances,
codes, and other governmental mandates and restrictions
that are applicable to the Powder Coatings Business or the
Real Property and relate to emissions, discharges, and
releases of Hazardous Materials into land, soil, ambient
air, water, and atmosphere, and/or the generation,
treatment, storage, transportation, and disposal of
hazardous wastes.
Environmental Matter Any action, condition, or event giving rise to a legal
obligation under the Environmental Laws that relate to the
Powder Coatings Business.
Facility Any of the German Facility, the Spanish Facility, the
Swedish Facility or the UK Facility.
Financial Debt All indebtedness for money borrowed incurred by the Ferro
Sellers.
German Facility Those facilities used by the Ferro Sellers in the conduct
of the Powder Coatings Business located at Zur xxxxx Xxxx
0, Xxxxxxxx, Xxxxxxx.
German Geschaftsfuhrer The following three management Employees of RPL Germany:
(1) Xxxxxxxx Xxxxx,
(2) Xxxxxx Xxxx, and
(3) Xxxxxxx Xxxx.
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Appendix A
TERM MEANING
Hazardous Materials Any material or condition that is defined as "hazardous" or
is subject to regulation under an Environmental Law,
including pollutants, chemicals, contaminants, petroleum
and petroleum products, and other hazardous or toxic
substances.
Health and Safety Liabilities Any cost, damages, expense, liability, fine, penalty,
judgment, award, amount paid in settlement or any other
obligation or responsibility arising from or under any
Health and Safety Law, including those consisting of or
relating to -
(1) Any health or safety matter or condition, including
on-site or off-site contamination and injury or
occupational disease resulting from exposure to any
chemical product or hazardous substance;
(2) Any legal or administrative proceeding, claim,
demand or response, remedial or inspection cost or
expense arising under any Health and Safety Law;
(3) Financial responsibility under any Health and Safety
Law for cleanup costs or corrective action,
including any cleanup, removal, containment, or
other remediation or response actions required by
any Health and Safety Law; or
(4) Any other compliance, corrective, or remedial
measure required under any Health and Safety Law.
Health and Safety Laws Laws, regulations, orders, ordinances, codes, and other
governmental mandates and restrictions applicable to the
Powder Coatings Business relating to the health and/or
safety of employees or others having business dealings with
the Powder Coatings Business.
Health and Safety Matter Any action, condition, or event giving rise to a legal
obligation under the Health and Safety Laws that relate to
the Powder Coatings Business.
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Appendix A
TERM MEANING
Inventories Inventories, wherever located, including inventories of raw
materials, work-in-process, finished goods, and packaging
held or used by the Ferro Sellers primarily in their
conduct of the Powder Coatings Business.
Leases Leases and similar contractual rights affording the right
to use or enjoy intangible property or property rights
arising primarily out of the Ferro Sellers' conduct of the
Powder Coatings Business.
Licenses Leases and similar rights affording the right to use or
enjoy intangible property or intangible property rights,
including software, arising primarily out of the Ferro
Sellers' conduct of the Powder Coatings Business.
Material Event Any condition, circumstance, occurrence, or other event,
which has had or could be reasonably expected to have a
material and adverse effect on the Powder Coatings Business
Condition or the ability of Sellers to consummate the
transactions contemplated hereby or perform any of their
obligations hereunder, including any of such event
resulting from any --
(1) Act of God, flood, windstorm, earthquake,
accident, fire, explosion, casualty, riot,
requisition or taking of property by governmental
authority, war, embargo, or other event outside
the Ferro Sellers' control;
(2) Termination, cancellation, or modification of any
Contract, Lease, License, or Permit;
(3) Default by any of the Ferro Sellers under any
Contract, Lease, License, or Permit; or
(4) Filing (whether voluntary or involuntary) of a
petition in bankruptcy or commencement of any
other action involving creditors' rights or
debtors' remedies affecting any of the Ferro
Sellers.
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Appendix A
Other Business Contracts Contracts other than Purchase Contracts and Sales Contract
to which the Ferro Sellers are party or to which the Ferro
Sellers are bound which arisen primarily out of the Ferro
Sellers' conduct of the Powder Coatings Business.
TERM MEANING
Other Current Liabilities Those current liabilities of the Ferro Sellers arising
primarily out of the Ferro Sellers conduct of the Powder
Coating Business reflected in the Preliminary Working
Capital Statement as the same shall exist at Closing.
Owns or Ownership Such ownership as confers upon the party or person having
it good and marketable title to and control over the thing
or right owned, free and clear of any and all Encumbrances.
Permits Permits, approvals, and qualifications issued by any
government or governmental unit, agency, board, body, or
instrumentality and all applications for such items held or
used by the Ferro Sellers primarily in their conduct of the
Powder Coatings Business.
Permitted Encumbrances The following:
(1) Liens for taxes accrued but not yet payable;
(2) Liens arising as a matter of law in the ordinary
course of business (provided the Ferro Sellers are
not delinquent in respect of the obligations
secured by such liens); and
(3) Such other imperfections of title and other
encumbrances which singly or taken together, do
not and are not likely to materially interfere
with the use of such property in the conduct of
the Powder Coatings Business as it has been
conducted prior to the Closing.
Prescribed Rate 5%.
Prepaid Items Prepaid and similar items arising out of the conduct of the
Powder Coatings Business, including prepaid expenses,
deferred charges, advance payments, and other prepaid items
arising primarily out of the Ferro Sellers' conduct of the
Powder Coatings Business.
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Appendix A
TERM MEANING
Purchase Contracts Orders, contracts, and commitments for the purchase of
goods and/or services, such items relating to the purchase
of capital, tooling, products, supplies, and software
arising primarily out of the Ferro Sellers' conduct of the
Powder Coatings Business.
Powder Coatings Business Condition The business, results of operations, prospects, properties,
assets, liabilities (fixed and otherwise), and condition
(financial and otherwise) of the Powder Coatings Business
taken as a whole.
Real Property Those real properties or portions thereof, including all
land, buildings, improvements, fixtures, and appurtenances
thereto, used by the Ferro Sellers in the conduct of the
Powder Coatings Business.
Retained Intellectual Property All intellectual property rights held or used by the Ferro
Sellers whatsoever, other than the Acquired Intellectual
Property, including all financial data relating to the
Acquired Intellectual Property, all items or matters of the
types listed in part (4) of the definition of Acquired
Intellectual Property to the extent such items or matters
are not physically located at a Facility as of the Closing,
and items listed on Subpart H-9 of the Powder Coatings
Disclosure Package
Sales Contracts Orders, contracts, commitments, and proposals for the sale
of Products, including such items relating to repair,
restoration, maintenance, preservation, and similar
operations arising primarily out of the Ferro Sellers'
conduct of the Powder Coatings Business.
Shared Intellectual Property That portion of the Retained Intellectual Property that
relates to the following:
(1) Novel formulations for non-traditional substrates,
including next-generation Impress;
(2) Low temperature, fast cure products;
(3) Enhanced corrosion resistance coatings;
(4) Coil coatings; and
(5) Next-generation Valophene.
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Appendix A
TERM MEANING
Spanish Facility Those spaces used by the Ferro Sellers in the conduct of
the Powder Coatings Business at its facilities located at
Xxxxxxxxx Xxxxxxxx - Xxxxxxxxx, xx. 00,000, Xxxxxxxx
(Xxxxxxxxx), Xxxxx and identified as such in Part F of the
Disclosure Package.
Swedish Facility Those facilities used by the Ferro Sellers in the conduct
of the Powder Coatings Business located at Lia Xxxxxxxxxxxx
0, Xxxx, Xxxxxx.
Tangible Personal Property Tangible personal property (whether owned, leased, or
otherwise), including all machinery, equipment, tooling,
dies, molds, jigs, patterns, gauges, materials handling
equipment, furniture, office equipment, cars, trucks, and
other vehicle held or used by the Ferro Sellers in their
conduct of the Powder Coatings Business and listed in Part
G of the Disclosure Package.
Taxes All Federal, state, foreign and other net income, gross
receipts, gains, sales, use, employment, social security,
withholding, occupation, franchise, profits, excise, real
and personal property, land, value added, capital,
consumption, national insurance, registration, custom,
stamp, transfer, environmental, alternative minimum or
other taxes, fees, duties, assessments or charges of any
kind whatsoever whether payable directly or by withholding,
together with any interest and penalties, additions to Tax
or additional amounts with respect thereto, imposed by any
taxing authority.
Third-Party Claims Causes of action, rights of action, and warranty and
product liability claims against other persons arising
primarily out of the Ferro Sellers' conduct of the Powder
Coatings Business.
Trade Accounts Payable The accounts payable of any of the Ferro Sellers arising
primarily out of the Ferro Sellers' conduct of the Powder
Coatings Business, including all such amounts owing under
Contracts, Leases, and Licenses, as the same shall exist at
Closing.
Trade Accounts Receivable The accounts receivable of any of the Ferro Sellers arising
primarily out of the Ferro Sellers' conduct of the Powder
Coatings Business.
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Appendix A
TERM MEANING
UK Facility Those spaces used by the Ferro Sellers in the conduct of
the Powder Coatings Business at its facilities located at
Xxxxxxxx, Xxxxxxxx, Xxxx Xxxxxxxx, XX, and identified as
such in Part F of the Disclosure Package.
Working Capital The sum of following to the extent included in the Acquired
Assets and Assumed Liabilities -
(1) Trade Accounts Receivable plus
(2) Inventories plus
(3) Prepaid Items for which the benefit thereof will
accrue to Buyer after the Closing minus
(4) Trade Accounts Payable minus,
(5) Other Current Liabilities,
all as reflected on the books of the Powder Coatings
Business in accordance with the Accounting Principles as of
a given date.
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