PURCHASE AGREEMENT by and between MOMENTIVE SPECIALTY CHEMICALS INC. and HARIMA CHEMICALS, INC. _________________ November 30, 2010 ________________ Table of Contents

 

(ah)make any material change in any tax policy or in any method of accounting or accounting policy or practice used in preparation of the financial statements of the Business other than those required by GAAP or applicable Law;

 

(ai)except to the extent required by applicable Law, permit Holdco or the Acquired Subsidiaries to amend their organizational documents;

 

(aj)permit Holdco or any of the Acquired Subsidiaries to redeem or otherwise acquire any shares of its capital stock or issue any capital stock or any option, warrant or right relating thereto or any securities convertible into or exchangeable for any shares of capital stock;

 

(ak)plan, announce, implement or effect any reduction in force, lay-off, early retirement program, severance program or other program concerning the termination of employment of the Business Employees;

 

(al)hire any new Business Employee with annual salary and benefits of a monetary value in excess of $150,000 in the aggregate; or

 

(am)enter into any oral or written agreement, contract, commitment, arrangement or understanding to do any of the foregoing.

For the avoidance of doubt, nothing contained in this Section 6.2 shall prohibit any of the Selling Parties from declaring, setting aside, making or paying any dividend or other distribution, payable in cash or otherwise, with respect to any of its capital stock.

 

6.3 Efforts; No Inconsistent Actions.

 

(a) Subject to the terms and conditions hereof, the Seller and the Buyer shall, and the Seller shall cause each other Selling Party to, cooperate and use their reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to consummate and make effective the Transaction and to cause the conditions to each other's obligation to close the Transaction as set forth in Article VII to be satisfied. The Selling Parties and the Buyer shall cooperate with each other to the extent reasonable in connection with the foregoing.

 

(b) In furtherance and not in limitation of the foregoing, except for the filings and notifications made pursuant to applicable Antitrust Laws to which Section 6.3(c), and not this Section 6.3(b), shall apply, the Seller and the Buyer shall use their reasonable best efforts to file applications with any applicable Governmental Entity whose waiver, consent, authorization or approval is required in connection with the consummation of the Transaction as promptly as practicable following the date hereof and in any event no later than ten (10) Business Days following the date hereof. The Seller and the Buyer shall cooperate and use their reasonable best efforts to obtain any waiver, consent, authorization or approval required for the Closing, to respond to any requests for information from a Governmental Entity, and to contest and resist any Litigation and to have vacated, lifted, reversed or overturned any Order (whether temporary, preliminary or permanent) that restricts, prevents or prohibits the consummation of the Transaction. To the extent permitted by applicable Law, t he Seller and the Buyer shall provide the other the opportunity to make copies of all material correspondence, filings or communications (or memoranda setting forth the substance thereof) between such Party or its Representatives, on the one hand, and any Governmental Entity, on the other hand, with respect to this Agreement or the Transaction. The Selling Parties and the Buyer shall notify and keep the other advised as to (i) any material communication from any Governmental Entity regarding the Transaction and (ii) any Litigation pending and known to such Party or, to its knowledge, threatened, which challenges the Transaction.

 

(c) As promptly as practicable following the date hereof, the Parties shall make all filings required under any Antitrust L aw. The Buyer and the Seller shall: (i) cooperate fully with each other and shall furnish to the other such necessary information and reasonable assistance as the other may reasonably request in connection with its preparation of any filings required under any Antitrust Law; (ii) keep the other Party reasonably informed of any communication received by such Party from, or given by such Party to any Antitrust Authority, and of any communication received or given in connection with any proceeding by a private party regarding the Transaction; and (iii) permit the other Party to review and incorporate the other Party's reasonable comments in any communication given by it to any Antitrust Authority or in connection with any proceeding by a private party related to Antitrust Laws.

 

(d) The Buyer and the Seller shall each use its reasonable best efforts to ensure the prompt expiration of any applicable waiting period under any applicable Antitrust Law and the approval by any relevant Antitrust Authority. Notwithstanding anything herein to the contrary, the Buyer shall take any and all action necessary, including (i) selling or otherwise disposing of, or holding separate and agreeing to sell or otherwise dispose of, assets, categories of assets or businesses of the Acquired Subsidiaries or the Buyer or their respective Subsidiaries; (ii) terminating existing relationships, contractual rights or obligations of the Acquired Subsidiaries or the Buyer or their respective Subsidiaries; (iii) terminating any venture or other arrangement; (iv) creating any relationship, contractual rights or obligations of the Acquired Subsidiaries or the Buyer or their respective Subsidiaries; (v) effecting any other change or restructuring of t he Acquired Subsidiaries or the Buyer or their respective Subsidiaries; or (vi) any obligation to undertake, or to refrain from taking, any action (each a “Remedy”) to ensure that no Governmental Entity enters any order, decision, judgment, decree, ruling, injunction (preliminary or permanent), or establishes any Law, rule, regulation or other action preliminarily or permanently restraining, enjoining or prohibiting the consummation of the Transaction (an “Antitrust Prohibition”) or to ensure that no Antitrust Authority with the authority to clear, authorize or otherwise approve the consummation of the Transaction, fails to do so by the Expiration Date.

 

(e) Prior to the Closing, the Seller shall, and shall cause each other Selling Party to, use commercially reasonable efforts to obtain (and cooperate with the Buyer in obtaining) all waivers, consents, Permits, authorizations, approvals of, and exemptions by, any third party necessary for the consummation of the Transaction and the satisfaction of conditions set forth in Sections 7.2(c) and (d), and the Buyer shall provide its reasonable cooperation in connection with the foregoing.

 

(f) All documents required to be filed by either of the Parties with any Governmental Entity in connection with this Agreement or the Transaction will comply in all material respects with the provisions of applicable Law.

 

6.4 Expenses of Sale. Each of the Selling Parties and the Buyer agree that, except with respect to the expenses incurred in connection with the Pre-Closing Restruct uring, each of them shall bear its and their own direct and indirect expenses incurred in connection with the negotiation and preparation of the Transaction Documents and the consummation and performance of the Transaction. All transfer, documentary, gross receipts, sales and use Taxes (collectively, “Transfer Taxes”), other Taxes and similar Liabilities, if any, resulting from the Transaction and the Closing shall be paid by the Seller. Notwithstanding the foregoing, at the

Closing, the Buyer shall pay the Seller $500,000 as reimbursement for the direct and indirect expenses incurred by the Selling Parties in connection with the preparation of the documents and agreements related to, and the consummation and performance of, the Pre-Closing Restructuring; provided, that in the event that this Agreement is terminated for any reason (other than a termination by the Buyer due to the Seller's material breach of this Agreement), promptly following such termination, the Buyer shall reimburse the Seller upon the Seller's written request (which written request shall include supporting documentation, such as invoices and receipts) for any direct or indirect expenses incurred by the Selling Parties prior to the date of such termination in connection with the preparation of the documents and agreements related to, and the consummation and performance of, the Pre-Closing Restructuring and any Transfer Taxes resulting from the Pre-Closing Restructuring up to an amount not to exceed $500,000. All charges, costs and fees which result from the filings under applicable Antitrust Laws and in compliance with other regulatory requirements, including the charges, costs and fees of the Antitrust Authorities, shall be borne equally by the Seller and the Buyer.

 

6.5 Maintenance of Records. The Seller and the Selling Subsidiaries undertake (i) for a period of six (6) years from the Closing Date (or such longer periods as may be required by Law), to retain all records (including Tax Returns) and documents relating to the Business that have not been transferred at Closing to the Buyer and (ii) to make available to the Buyer for inspection and copying, at the Buyer's sole expense, at reasonable times and upon request therefor, all such records to the extent not so disposed of. The Buyer undertakes (i) for a period of six (6) years from the Closing Date (or such longer periods as may be required by Law), to retain all records and documents relating to the Business that have been transferred at Closing to the Buyer and (ii) to make available to the Seller for inspection and copying, at the Seller's sole expense, at reasonable times and upon request therefor, all such records to the extent not so disposed of.

 

Notification of Certain Matters; Supplemental Information.

 

(a) Each Party shall give prompt notice to the other of (i) the occurrence, or failure to occur, of any event or the existence of any condition that has caused or could reasonably be expected to cause any of its representations or warranties contained in this Agreement to be untrue or inaccurate in any material respect at any time after the date hereof, up to and including the Closing Date, that reasonably could be expected to prevent the Closing from occurring and (ii) any failure on its part to comply with or sa tisfy, in any material respect, any covenant, condition or agreement to be complied with or satisfied by it under this Agreement, which failure reasonably could be expected to prevent the Closing from occurring.

 

(b) The Seller shall have the right from time to time prior to the Closing to supplement the Schedules prepared by it with respect to any matter not existing or, to the extent that a representation or warranty is qualified by a reference to the Knowledge of the Seller, known as of the date of this Agreement which, if existing or known by the Seller as of the date of this Agreement, would have been required to be set forth or described in such Schedule. The Seller shall provide any such supplemental disclosure as promptly as practicable. In th e event that the Seller delivers a supplemental disclosure within five (5) Business Days of a date which otherwise would have been the Closing Date, the Buyer shall have the right to delay the Closing in order to consider and evaluate the impact of such disclosed matter, provided, however, that unless such disclosure renders a condition set forth in Section 7.2, other than Section 7.2(a), unsatisfied, the Closing shall occur five (5) Business Days after such date which otherwise would have been the Closing Date. Any such supplemental disclosure will be deemed to have cured any breach of any representation or warranty made in this Agreement for purposes of determining whether or not the conditions set forth in Section 7.2(a) have been satisfied as of the Closing Date, but not for purposes of determining whether or not other conditions set forth in Section 7.2 have been satisfied. Moreover, such supplemental disclosures will be deemed not to have been disclosed for purposes of qualifying any of the representations and warranties made in this Agreement as of the Closing Date for purposes of determining whether the Buyer and the Buyer Indemnified Parties are entitled to indemnification pursuant to Section 11.1(a) (it being understood that all such representations and warranties set forth in Article IV (other than any that, by their terms, are being made as of the date hereof only) are being remade as of the Closing Date for purposes of Section 11.1(a)).

 

6.7 Confidentiality; Publicity.

 

(a) Prior to the Closing Date and after any termination of this Agreement, each Party (the “Receiving Party”) and its Affiliates will hold, and will use their best efforts to cause their respective Representatives to hold, in confidence, unless compelled to disclose by judicial or administrative process or by other requirements of Law, all confidential documents and information concerning the Business or the other Party or its Affiliates furnished to the Receiving Party or its Affiliates by th e other Party (the “Disclosing Party”) in connection with the Transaction, except to the extent that such information can be shown to have been (i) previously known on a non-confidential basis by the Receiving Party, (ii) in the public domain through no fault of the Receiving Party or (iii) later lawfully acquired by the Receiving Party from sources other than the Disclosing Party; provided, that the Receiving Party may disclose such information to its Representatives in connection with the Transaction so long as such Representatives are informed by the Receiving Party of the confidential nature of such information and are directed by the Receiving Party to treat such information confidentially. The Receiving Party s hall be responsible for any failure to treat such information confidentially by such Persons. If this Agreement is terminated, each Receiving Party and its Affiliates will, and will use their

reasonable best efforts to cause their respective Representatives to, destroy or deliver to the Disclosing Party all documents and other materials, and all copies thereof, obtained by the Receiving Party or its Affiliates or on their behalf from the Disclosing Party or its Affiliates in connection with this Agreement that are subject to such confidence; provided, that each Receiving Party may retain one set of such documents and other materials for archival purposes and use in connection with any dispute arising out of this Agreement or the transactions contemplated hereby.

 

(b) Except as may be required by Law or by the final decision of a stock exchange, regulatory agency or other authority, no press or publicity release or other announcement concerning this Agreement or the Transaction shall be issued without advance approval of the form and substance thereof by the Seller and the Buyer; provided, that from and after the date hereof, discussions may be held with financial institutions for the purpose of opening bank accounts for the use of the Business following the Closing, customers, suppliers, employees and other business partners of the Business in accordance with a communication plan to be separately agreed between the Parties; provided, further, that the Seller or its Representatives may participate in any such discussions at the Seller's election.

 

6.8 Further Assurances. From time to time following the Closing, each of the Parties shall, and shall cause their respective Affiliates to, execute, acknowledge and deliver such conveyances, notices, assumptions, releases, consents, documents and other instruments and papers, and perform such further acts as may be reasonably required or desirable to carry out the provisions hereof and the Transaction, including obtaining any Permits, consents, authorizations, approvals of, or effecting the notification of or filing with, each Person, whether private or governmental, whose consent or approval is required in order to permit the consummation of, and to give full effect to, the Transaction. Notwithstanding anything to the contrary contained in this Agreement, in the event that any of the Excluded Assets physically remain at the Owned Real Property or the L eased Real Property from and after the Closing (such assets the “Remaining Assets”), then the Buyer shall (i) refrain from using the Remaining Assets in any manner in connection with the operation of the Business or for any other purpose (except as contemplated by the Transaction Documents); (ii) to the extent applicable, treat such Remaining Assets as “confidential documents and information” subject to Section 6.7 (without giving effect to the first clause of the first sentence thereof); and (iii) notify the Seller of the Remaining Assets and promptly, at the Seller's election and expense, either (x) destroy such Remaining Assets or (y) at the Seller's sole expense, return such Remaining Assets to the Se ller as directed by the Seller.

 

6.9 WARN Act. Since January 1, 2008, neither the Seller nor any Selling Party has taken any action, or series of actions, with respect to the Business Employees, which action or series of actions constitute, individually or in the aggregate, a “Plant Closing” or “Mass Layoff” under the Worker Adjustment and Retraining Notification Act, 29 U.S.C. §§ 2101 et seq. (the “WARN Act”) or any similar local Law. Exc ept as set forth on Schedule 6.9, neither the Seller nor any Selling Party has involuntarily terminated or reduced by more than fifty percent (50%) in hours or work the employment of any employee of the Business during the two (2) full calendar months and the partial month preceding the date hereof. The Buyer hereby indemnifies the Seller and their respective Affiliates against, and agrees to hold each of them harmless from, any and all Liabilities incurred or suffered by the Seller or any of their respective Affiliates with respect to the WARN Act or any similar state or local Law arising as a direct result of the Transaction and without regard to any other employees of Seller not constituting Business Employees. During the sixty (60) calendar days following the Closing Date, the Buyer shall not take any action, or series of actions, with respect to the Business Employe es, which action or series of actions constitute, individually or in the aggregate, a “Plant Closing” or “Mass Layoff” under the WARN Act.

 

6.10 IT Systems.

        

(a) Subject to the terms and conditions of this Agreement, the Seller hereby grants to the Buyer a non-exclusive, non- transferable (except as set forth in Section 13.6), perpetual, worldwide, royalty-free (other than as provided below), fully paid-up (other than as provided below), irrevocable right and license, under the Seller's Intellectual Property, effective as of the Closing Date, to use, copy, reproduce, modify, perform, display and create derivative works based on the Custom IT System Components solely for the internal use of the Buyer, Holdco and the Acquired Subsidiaries in connection with (i) the conduct of the Business by the Buyer at any of (A) the Owned Real Properties, (B) the Leased Real Properties, or (C) any other real property location acquired or leased by Holdco or any Acquired Subsidiary for the purpose of constructing new facilities or relocating facilities that are subject to the license granted hereunder immediately prior to such relocation (collectively, t he “Licensed Properties”) or (ii) the organic evolution of the Business following the Closing at the Licensed Properties, in each case, specifically excluding the conduct of any legacy businesses of the Buyer or any businesses acquired through acquisition. In full consideration of the right and license granted under this Section 6.10, in connection with or promptly following the termination of the IT Services pursuant to the Transitional Services Agreement, and in any event within five (5) Business Days of such termination, the Buyer shall pay or cause to be paid to the Seller or its designee, without any right to offset, an amount equal to $1.0 million (which for the avoidance of doubt will be in addition to, and no t included in, the Purchase Price). The right and license granted hereunder includes the right of the Buyer to have such right and license exercised by a third party on behalf of and for the sole benefit of the Buyer but is otherwise non-sub-licensable. The Seller shall deliver the Custom IT System Components (including (i) the source

code of any software included in the Custom IT System Components and all existing documentation, developers' notes and similar information relating thereto and (ii) all tangible embodiments of the Custom IT System Components) to the Buyer at or prior to the ter mination of the IT Services provided pursuant to the Transitional Services Agreement. No fewer than thirty (30) days prior to the Closing Date, the Seller shall also disclose in writing to the Buyer in reasonable detail the environment required to run the Custom IT System Components (as currently run by the Seller), including any and all hardware, software and network requirements. Except as expressly provided in this Section 6.10, the licenses granted in this Section 6.10 do not permit Buyer to, and Buyer will not, and will not permit any third parties to: (a) translate, disassemble, decompile or reverse engineer the Custom IT System Components; (b) rent, lease, loan, sell, transfer, license, sublicense, distribute or use the Custom IT System Components in any manner to provide service bureau or time-sharing services to third parties; (c) alter, remove or obscure any copyright or other proprietary notices on or in the Custom IT System Components; and (d) use the Custom IT System Components for any purpose outside of the Licensed Properties, or with respect to either (x) legacy businesses of the Buyer or its Affiliates (other than Holdco and the Acquired Subsidiaries) or (y) businesses of the Buyer or its Affiliates acquired through acquisition, in each case even if such business operates at the Licensed Properties. Except for the license and rights expressly granted with respect to the Custom IT System Components in this Section 6.10, the Seller owns the entire right, title and interest in and to the Custom IT System Components, and no other license or right is granted to Buyer, by implication, est oppel or otherwise under any of Seller's Intellectual Property. All source code and documentation or specifications relating to the Custom IT System Components will be treated as confidential information of the Seller under this Agreement, and Buyer's obligation to treat the source code as confidential and not disclose such source code to any third parties will survive any termination or expiration of this Agreement in perpetuity. For the avoidance of doubt, the Buyer is required to obtain its own license directly from SAP or any other third party in order to use any SAP software or any other third party software to receive the benefits of the Custom IT System Components, and nothing contained in this Section 6.10 shall be deemed to require or impose any obligation on the Seller to license to the Buyer or obtain any license from SAP or any other third party for the Buyer . For clarity, the Buyer and/or its Affiliates shall own all right, title and interest (including all Intellectual Property) in and to any and all modifications and derivatives based on the Custom IP System Components authored, created or developed by Buyer, Holdco or the Acquired Subsidiaries hereunder.

 

(b) From the date hereof until and including the Closing Date, the Parties shall cooperate and assist each other in good faith to ensure that all requirements necessary for the performance of the IT Services by the Seller to the Buyer are met in accordance with the specifications and principles set forth on Schedule 6.10(b).

 

6.11 Insurance Coverage. The Buyer is aware that the Business is covered by group umbrella insurance policies taken out by the Seller and its Affiliates and that the Business will not be covered by such umbrella insurance policies after Closing. The Buyer shall undertake measures so that the current umbrella insurance policies are replaced by other insurance policies for the Business as per the Closing Date at the latest if and to the extent such umbrella insurance policies cover the Business. The Seller, the Buyer and the Buyer's insurance broker shall reasonably cooperate to identify such umbr ella insurance policies and to facilitate a smooth replacement thereof on the Closing Date.

 

6.12 Intercompany Receivables and Payables. Except as expressly provided in this Agreement or the other Transaction Documents, all receivables or payables, and any other obligation or agreement of the Business from or to, as applicable, the Seller, any of the Selling Subsidiaries or any of their respective Affiliates (other than Holdco and the Acquired Subsidiaries), including any guarantee by the Seller or any of the Selling Subsidiaries or their respective Affiliates of any obligations of Holdco or any of the Acquired Su bsidiaries, shall be terminated not later than the Closing.

 

6.13 Use of the Seller's Name and Marks. The Buyer agrees that, as soon as reasonably practicable following the Closing and, in any event, not later than six (6) months after the Closing Date: (a) the Buyer shall change the names of each of the Acquired Subsidiaries listed on Schedule 6.13 to a name that is not confusingly similar to or containing any of the foregoing names, and specifically removing the names & ldquo;Hexion” and/or “Momentive” from the entity's name; (b) the Buyer shall, and shall cause Holdco and the Acquired Subsidiaries to, cease to use, distribute, display or market any article or instrument of any kind, including signs, invoices, labels, letterhead, business cards, packaging, advertisement or websites, that reflects or includes any logo, trademark, trade name, trade dress, service mark, domain name or website that is confusingly similar to or containing any name, mark or logo of the Seller or the Selling Subsidiaries that is not included in Purchased Assets; and (c) the Buyer shall return or destroy any and all such articles or instruments in the possession of the Buyer or any of its Affiliates (including Holdco and the Acquired Subsidiaries), and (d) the Buyer shall modify any web site or web page regarding the Business to remove any such logo, trademark, trade name, trade dress, service mark or domain name. The Buyer agrees that, as soon as reasonably practicable after the Closing, the Buyer shall mark products and other property acquired hereunder, both internally and externally, with a name and mark that is not confusingly similar to or containing any name, mark or logo of the Seller or the Selling Subsidiaries that is not included in the Purchased Assets. The Buyer agrees that none of the Buyer or any Affiliate of the Buyer shall advertise or hold itself out as the Seller or an Affiliate thereof. The Buyer agrees that any use of the Seller's names and marks during the transition period provided under this Section 6.13 shall be substantially consistent with the trademark practices and quality standards of Seller in its use of such names and marks. Such use, and all goodwill associated with such use, shall inure to the benefit of the Seller. The

Seller will have the right to monitor the quality of the products, services and any promotional materials bearing the Seller's names and marks. The Seller's names and marks will remain the exclusive property of the Seller.

 

6.14 VAT Receivables.

(a) From and after the Closing, the Buyer and the Seller shall, and the Buyer shall cause the Acquired Subsidiaries to, use commercially reasonable efforts to collect the full amount of each VAT Receivable as promptly as practicable. None of the Buyer, the Seller, nor any of their respective Affiliates shall compromise the right of the Acquired Subsidiaries to any such VAT Receivable. The Seller shall have the exclusive right to conduct and control (as it may decide in its sole discretion and at its sole expense) any legal proceeding and negotiations, including audits, with respect to any VAT Receivable. The Seller shall consult with the Buyer, as reasonably requested from time to time, in respect of any such legal proceedings or negotiations. The Buyer shall promptly deliver to the Seller any correspondence received by it or any of its Affiliates (including, from and after the Closing, the Acquired Subsidiaries) with respect to any VAT Receivable.

 

(b) From and after the Closing, the Buyer shall pay to the Seller the amount of any moneys received by the Buyer or any of its Affiliates (including the Acquired Subsidiaries) with respect to any VAT Receivable within ten (10) calendar days of receipt thereof without set-off or deduction.

 

6.15 Definitive Documentation of Pre-Closing Restructuring. The Seller shall give the Buyer a reasonable opportunity to review and comment on the definitive documentation governing the Pre-Closing Restructuring, and all such documentation shall be subject to the Buyer's prior written consent, such consent not to be unreasonably withheld, conditioned or delayed.

 

6.16 Guarantees. The Buyer agrees and acknowledges that the Seller and its Affiliates (other than the Acquired Subsidiaries) intend to seek the release of the guara ntees, indemnities, surety bonds, letters of credit, letters of comfort or other similar instrument that survive beyond the Closing for the benefit of the Business or any Acquired Subsidiary (collectively, the “Business Guarantees”) listed on Schedule 6.16. The Buyer shall use its best efforts to cause the Buyer or one or more of its Subsidiaries to be substituted as soon as reasonably practicable (with effect from and after the Closing) in all respects for the Seller and/or its Affiliates (other than the Acquired Subsidiaries) with respect to any Business Guarantee, and to cause the Seller and/or such Affiliate to be released in respect of, all obligations of any Acquired Subsidiary and any obligations related to an y Purchased Asset or any Assumed Liability, under any Business Guarantee; provided, that such substitution, removal, release or termination shall be in a form and substance satisfactory to the Seller in its sole discretion.

 

6.17 Tax Matters.

 

(a) The Seller shall timely prepare and file or cause to be timely prepared and filed all Tax Returns of or with respect to Holdco or the Acquired Subsidiaries that are required to be filed after the Closing Date but that relate to a taxable period ending on or prior to the Closing Date. To the extent relating to Holdco or the Acquired Subsidiaries, all such Tax Returns shall be prepared on a basis consistent with past practice. The Buyer shall timely prepare and file or cause to be timely prepared and filed all Tax Returns of or with respect to Holdco or the Acquired Subsidiaries that relate to a taxable period beginning prior to the Closing Date and ending after the Closing Date. Prior to the filing of any such Tax Return prepared by the Buyer, the Buyer shall provide the Seller with a substantially final draft of such Tax Return at least fifteen (15) calendar days prior to the due date for such Tax Return (or, if required to be filed within thirty (30) calendar days after the Clos ing Date or the end of the taxable period to which such Tax Return relates, as soon as reasonably possible following the Closing Date or the end of such taxable period, as the case may be) for the Seller's review and approval. The Seller shall notify the Buyer of any objections that the Seller may have to any items set forth in any such draft Tax Return, and the Buyer and the Seller agree to consult and attempt to resolve in good faith any such objection and to mutually consent to the filing of such Tax Return. If the Seller and the Buyer cannot reach complete agreement within fifteen (15) days (or by the due date of such Tax Return, if earlier), an accounting firm that is mutually selected by the parties shall resolve such dispute. Such Tax Returns shall be prepared or completed in a manner consistent with prior practice of the applicable Acquired Subsidiary unless otherwise required by Law. Without the prior written consent of the Seller or unless otherwise required by Law, the Buyer shall not amend any Ta x Return of any of the Acquired Subsidiaries for any Pre-Closing Tax Period.

 

(b) After the Closing Date, the Buyer and the Seller shall provide each other with such cooperation and information relating to the Business, Holdco or any Acquired Subsidiary as the other Party may reasonably request in (i) filing any Tax Return or other Tax filing or claim for refund of Taxes, (ii) determining any Tax liability or right to refund of Taxes or (iii) conducting or defending any audit or other proceeding in respect of Taxes.

 

(c) Any Tax refund (including any interest with respect thereto), and any equivalent benefit through a reduction in Tax liability for a post-Closing Date period, relating to Holdco or any of the Acquired Subsidiaries for any Pre-Closing Tax

Period shall be the property of the Seller, and, if received by the Buyer, Holdco or any of the Acquired Subsidiaries, shall be paid to the Seller promptly following receipt less any costs or expenses incurred by the Buyer, Holdco or an Acquired Subsidiary in connection therewith. The Buyer shall, if the Seller so requests and at S eller's expense, cause the relevant entity to file for and obtain any refunds or equivalent amounts to which the Seller is entitled under this Section 6.17(c) unless the Buyer determines in good faith that it would be adversely affected by such filing; provided, that the Buyer shall not be considered adversely affected by such a filing merely because the filing results in a reduction or elimination of a net operating loss, Tax basis, Tax credit or similar Tax item of Holdco or any of the Acquired Subsidiaries for a Pre-Closing Tax Period. In the event the Buyer or the Selling Parties, as the case may be, shall receive a refund of any Tax the liability for which was the subject of apportionment under Section 6.17(d) or (e) below, the amount of that refund shall be prorated between the parties in accordance with the manner in which the related Tax liability was apportioned. In the case of a Tax that is not subject to apportionment under Sections 6.17(d) or (e) bel ow, if the Selling Parties on the one hand, or the Buyer on the other hand, shall receive a refund of such Tax and such Tax has been paid by the other party, the party receiving the refund shall promptly remit such refund to the other party less any costs or expenses incurred by the receiving party in connection therewith.

 

(d) The Buyer and the Selling Parties shall apportion all real property, personal property, intangibles and other similar ad valorem Taxes (excluding, for the avoidance of doubt, any Transfer Taxes) paid or payable in connection with any of the Purchased Assets for the ad valorem Tax period in which the Closing occurs, such apportionments to be made as of the Closing Date, to be based upon the ad valorem Tax period for which such T axes are assessed and to be apportioned on per diem basis as of the completion of the Closing. Such apportionment shall be made at or prior to the Closing to the extent practicable. In the event that the applicable Tax bill or other information reasonably necessary for computing any such apportionment is not available on the Closing Date, the proration shall be based upon the actual amount of such Taxes or fees for the preceding year (or appropriate period) for which such actual Taxes or fees are available, provided that the Buyer and the Seller shall recalculate and re-prorate said Taxes and payments and make the necessary cash adjustments promptly upon the issuance, and on the basis of, the actual Tax bills received for any such ad valorem Tax period; provided, however, that any increase in the per diem rate in a Tax period beginning after the Closing Date shall not be taken into account in such allocation. The Selling Parties and the Buyer agree to furnish each other with such documents and other records as may be reasonably requested in order to confirm all adjustment and proration calculations made pursuant to this Section 6.17(d). The Selling Parties, on the one hand, and the Buyer on the other hand, shall make reconciliation payments to the other to effect the above proration, giving credit to the Selling Parties for any prepayment of such Taxes with respect to periods (or portions thereof) after the Closing Date.

 

(e) Except as provided in Section 6.4, Taxes not described in Section 6.17(d) (including, for the avoidance of doubt, any ad valorem Taxes imposed for a taxable period that ends prior to the Closing Date and any other Tax of the Selling Parties imposed for any taxable period) shall be apportioned to the Pre-Closing Tax Period on the basis of an interim closing of the books as of the completion of the Closing.

 

6.18 Non-Compete. For five (5) years following the Closing Date (or if such period is in excess of that allowed by applicable Law in any specific jurisdiction, then with respect to such jurisdiction only, the maximum period allowed under the applicable Law of such jurisdiction that is less than five (5) years following the Closing Date), the Seller shall not, and shall cause its direct and indirect Subsidiaries not to, directly or indirectly, own, manage, operate or control, or engage, join or participate in the ownership, management, operation or control of, any Person that is engaged in, or owns, operates, manages or controls any venture or enterprise which directly or indirectly engages in a Restricted Business; provided, t hat nothing contained in this Section 6.18 shall (i) preclude the Seller or any of its Affiliates from acquiring, owning or operating any Person, or the business of any Person, who is, directly or indirectly through its controlled Affiliates, engaged in a Restricted Business (such Person acquired, an “Acquired Competitor”) by means of (A) any merger, consolidation, joint venture, or other business combination pursuant to which the business of an Acquired Competitor is combined with the business of Seller or its Affiliates, (B) the acquisition by any of Seller or its Affiliates, directly or indirectly through its controlled Affiliates, of the capital stock of an Acquired Competitor, by way of tender or exchange offer, nego tiated purchase or other means, or (C) the acquisition by any of Seller or its Affiliates, directly or indirectly through its controlled Affiliates, of the assets, properties, or business of an Acquired Competitor, by way of a direct or indirect (through its controlled Affiliates) purchase, exchange, joint venture, or other means, in each case so long as the revenues for such Acquired Competitor from its competitive activities for the four full fiscal quarters immediately preceding the date that the definitive agreements for such transaction are executed do not exceed twenty-five percent (25%) of the total revenues for such Acquired Competitor for the four full fiscal quarters immediately preceding the date that the definitive agreements for such transaction are executed; or (ii) prohibit or otherwise restrict Seller or any of its Affiliates from developing or manufacturing any products for its own internal use or any other use not involving a sale or transfer to an unaffiliated third party for value.

 

6.19 Due Diligence Recordings. No later than the earlier to occur of (a) ten (10) Business Days prior to the Closing Date and (b) three Business Days following the termination of this Agreement, the Buyer shall destroy all Due Diligence Recordings and, following such destruction, the Buyer shall promptly deliver to the Seller a certificate, signed by a duly authorized officer of the Buyer, to the effect that the Buyer has satisfied its obligations under this Section 6.19.

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< div style="padding-bottom:16px;text-align:justify;text-indent:48px;" class="text-justify">“Transferred Working Capital” means an amount equal to (a) the Transferred Accounts Receivable, plus (b) the Transferred Inventory, plus (c) the Transferred Other Receivables minus (d) the Transferred Accounts Payable minus (e) the Transferred Other Payables, in each case (i) as transferred to the Buyer or retained by Holdco at the Closing and (ii) as defined in a manner consistent with the following trial balance accounts:

For the avoidance of doubt, Transferred Working Capital shall exclude balances relating to audit fees, taxes, insurance, loans and intercompany or affiliate items and all VAT Receivables.

“Transitional Services Agreement” has the meaning set forth in Section 8.3(a).

“Union Employees” has the meaning set forth in Section 9.1(b).

“VAT Receivables” means those VAT receivables listed on Schedule 12.1(b).

“WARN Act” has the meaning set forth in Section 6.9.

12.2 Rules of Construction. In this Agreement, unless the context otherwise requires:

(g)any reference in this Agreement to “writing” or comparable expressions includes a reference to facsimile transmission, email or comparable means of communication;

(h)the phrases “delivered” or “made available”, when used in this Agreement, shall mean that the information referred to has been physically or electronically delivered to the relevant parties including in the case of “made available” to the Buyer, material that has been posted in any “data room” (virtual or otherwise) established by the Seller;

(i)all terms defined in this Agreement in their singular or plural forms have correlative meanings when used herein in their plural or singular forms, respectively; words expressed in the masculine shall include the feminine and neuter gender and vice versa;

(j)references to Articles, Sections, Exhibits, the Recitals and the Preamble are references to Articles, Sections, Exhibits, the Recitals and the Preamble of this Agreement;

(k)references to “day” or “days” are to calendar days;

(l)references to “the date hereof” shall mean as of the date of this Agreement;

(m)the words “hereof,” “herein,” “hereto” and “hereunder,” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any provision of this Agreement;

(o)the words “include,” “includes” and “including” do not limit the preceding words or terms and shall be deemed to be followed by “without limitation” whether or not they are in fact followed by such words or words of similar import;

(p)the word “or” shall not be exclusive;

(q)references to any statute or statutory provision include a reference to that statute or statutory provision as amended, consolidated or replaced from time to time (whether before or after the date hereof) and include subordinate legislation made under the relevant statute or statutory provision;

(r)references to dollars or “$” are to U.S. dollars; and

(s)any amounts of money expressed in a currency other than U.S. dollars shall be converted into U.S. dollars at the Exchange Rate applicable on the Closing Date.

    

12.3 Exhibits and Schedules. The Exhibits and Schedules to this Agreement are incorporated i nto and form an integral part of this Agreement. If an Exhibit is a form of agreement, such agreement, when executed and delivered by the Parties, shall constitute a document independent of this Agreement.

 

12.4 Knowledge.

        

(a) When any representation, warranty, covenant or agreement contained in t his Agreement is expressly qualified by reference to the “Knowledge of the Seller” or words of similar import, it shall mean the current, actual knowledge of, or the knowledge that would reasonably be expected to be gained by Mr. Bertrand Falque, Mr. Bradley Crocker and Mr. Dan Bialkowski having made reasonable enquiries of (i) their direct reports, (ii) the Asia Regional Manufacturing Manager, and (iii) the heads of the following manufacturing facilities: Baxley, Georgia; Kallo, Belgium; Maastricht, The Netherlands; Mt. Maunganui, New Zealand and Concordia, Argentina. Where any representation, warranty or other provision in this Agreement refers to notice or written notice having been delivered or received by the Seller or its Affiliates, such representation, warranty or other provision shall be interpreted to include only any notice to the individuals liste d in the immediately preceding sentence or any notice of which one of such individuals has actual knowledge, or of which one of such individuals would reasonably be expected to have knowledge upon reasonable enquiry of such individual's direct reports.

(b) References herein to “Knowledge of the Buyer” or words of similar import shall mean the current, actual knowledge of, or the knowledge that would reasonably be expected to b e gained by Mr. Nobuo Makino, Mr. Joichiro Tanaka, Mr. Yoshinobu Matsuda, Mr. Mikio Katayama and Mr. Hiroto Ishiko having made reasonable enquiries of (i) their direct reports and (ii) persons occupying principal positions with the Buyer's primary outside consultants and advisors engaged in connection with the Transaction, including the Buyer's financial advisor and primary legal and accounting advisors.

 

 

13.2 Arbitration; Consent to Jurisdiction and Service of Process.

 

(t)Subject to Sections 2.4 and 6.17, any and all disputes and controversies arising out of, relating to or in connection with this Agreement, the other Transaction Documents (unless the relevant Transaction Document in dispute or controversy stipulates otherwise) or the Transaction (each, a “Dispute”) shall be settled by arbitra tion by a panel of three (3) arbitrators under the American Arbitration Association Rules then in force (the “AAA Rules”) in accordance with the following terms and conditions:

(i)    In the event of any conflict between the AAA Rules and the provisions of this Agreement, the provisions of this Agreement shall prevail;

 

(ii)    In the event that any Party asserts that there exists a Dispute, such Party shall deliver a written notice to the other Party specifying the nature of the asserted Dispute and requesting a meeting to attempt to resolve the same. If no such resolution is reached within thirty (30) calendar days after the delivery of such notice, either Party may commence arbitration hereunder by delivering to the other Party a notice of arbitration, which shall specify (A) the matters as to which arbitration is sought, (B) the nature of any Dispute, (C) the claims of the disputing Party, (D) the amount and nature of any damages, if any, sought to be recovered as a result of an alleged claim and (E) any other matters required by the AAA Rules then in force;

 

(iii)    The arbitration proceedings shall be held in New York, New York;

 

(iv)    The Seller, on the one hand, and the Buyer, on the other hand, shall appoint one (1) arbitrator expert in the subject matter of the Dispute in accordance with the AAA Rules, and the two (2) arbitrators so appointed shall appoint the third neutral, Independent Arbitrator, who shall be the presiding arbitrator, expert in the subject matter of the Dispute (the “Presiding Arbitrator”) in accordance with the AAA Rules within fifteen (15) Business Days from the appointment of the second arbitrator;

 

(v)    If the Seller's arbitrator and the Buyer's arbitrator are unable to agree on the Presiding Arbitrator within the fifteen (15) Business Days specified in Section 13.2(a)(iv), then the Seller's arbitrator and the Buyer's arbitrator shall each prepare a list of three (3) Independent Arbitrators and have the opportunity to designate as objectionable and eliminate one (1) Independent Arbitrator from the other arbitrator's list within seven (7) calendar days after submission thereof, and the Presiding Arbitrator shall then be selected by lot from the Independent Arbitrators remaining on the lists submitted by the Seller's arbitrator and the Buyer's arbitrator;

 

(vi)    Each Party will, upon the written request of the other Party, promptly provide the other with copies of documents relevant to the Dispute, and any disagreement regarding discovery, or the relevance or scope thereof, shall be determined by the Presiding Arbitrator, which determination shall be conclusive. All discovery shall be completed within forty-five (45) calendar days following the appointment of the Presiding Arbitrator;

 

(vii)The Seller and the Buyer shall each bear their own respective costs in relation to arbitration, and the arbitrators shall allocate their fees and expenses and any costs incurred in arriving at the determination to each Party in proportion to its respective gain and loss position with respect to the total amount awa rded by the arbitrators hereunder;

 

(viii)The arbitrators shall apply the substantive Law set forth in Section 13.1 of this Agreement without reference to conflicts of law principles;

 

(ix)     The arbitrators shall have the power to grant any remedy or relief that they deem just

and equitable and that is in accordance with the terms of this Agreement, including specific performance, and including injunctive relief, whether interim or final, and any such relief and any interim, provisional or conservatory measure ordered by the arbitrators may be specifically enforced by any court of competent jurisdiction. Each Party retains the right to seek interim, provisional or conservatory meas ures from judicial authorities, and any such request shall not be deemed incompatible with the agreement to arbitrate or a waiver of the right to arbitrate;

 

(x)    The final determination of the arbitrators must be agreed upon and signed by the Presiding Arbitrator or by at least two (2) of the three (3) arbitrators (as the case may be) and shall include a statement setting forth reasons for the disposition of any claim;

 

 

(xii)The award of the arbitrators may be enforced by any court of competent jurisdiction < /font>and may be executed against the Person and assets of the losing Party in any competent jurisdiction.

 

(u)Except for arbitration proceedings pursuant to Section 13.2(a), no action, lawsuit or other proceeding (other than the enforcement of an arbitration decision, an action to compel arbitration or an application for interim, provisional or conservatory measures in connection with the arbitration) shall be brought by or between the Parties in connectio n with any matter arising out of or in connection with this Agreement, the other Transaction Documents or the Transaction.

 

(v)Each Party hereby irrevocably submits to the non-exclusive jurisdiction of the United States District Court for the Southern District of New York and of any New York state court sitting in New York City, in connection with any such action, suit or proceeding, and agrees that any such action, suit or proceeding may be brought in such court; provided, that such consent to jurisdiction is solely for th e purpose referred to in this Section 13.2 and shall not be deemed to be a general submission to the jurisdiction of the courts of or in the State of New York other than for such purpose. Each Party hereby irrevocably waives defense of an inconvenient forum to the maintenance of any such action or proceeding.

 

(w)This Agreement evidences a transaction involving commerce within the meaning of the Federal Arbitration Act (9 U.S.C. §§1 et seq. ) as amended, and such act shall govern the interpretation and enforcement of the arbitration provisions in this Agreement.

 

13.3 Notices. All notices, consents, waivers or other communications required or permitted to be given hereunder shall be in writing and shall be delivered by hand or sent by facsimile (providing confirmation of transmission) or electronic submission or sent, postage prepaid, by registered, certified mail or internationally-recognized overnight courier service as follows:

(a) if to the Seller, to:

(b) if to the Buyer, to:

or to such other address as any Party to whom notice is to be given may hav e furnished to the other Party in writing in accordance herewith. Any such notice, consent, waiver or other communication shall be deemed to have been received (a) in the case of personal delivery, on the date of delivery, (b) in the case of a nationally-recognized overnight courier, the next day after being sent, (c) in the case of facsimile transmission or electronic transmission, on the next Business Day after confirmation of delivery is received by sender, and (d) in the case of mailing, on the fifth Business Day following that day on which the piece of mail containing such communication is deposited in the mail.

13.4 Entire Agreement. This Agreement and the other Transaction Documents contain the entire agreement among the Parties with respect to the Transaction and supersede all prior agreements, written or oral, with respect thereto, including the Confidentiality Agreement between the Parties, dated as of June 10, 2010.

 

13.5 Waivers and Amendments. This Agreement may be amended, superseded, canceled, renewed or extended, and the terms hereof may be waived, only by a written instrument signed by all the Parties or, in the case of a waiver, by the Party waiving compliance. No delay on the part of any Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any Party of any such right, power or privilege, nor any single or partial exercise of any such right, power or privilege, preclude any further exercise thereof or the exercise of any other right, power or privilege.

 

13.6 Binding Effect; Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors, assigns and legal representatives. This Agreement shall not be assigned by the Buyer by operation of law or otherwise without the prior written consent of the Seller; provided, that the Buyer shall be permitted, without the prior written consent of the Seller, to assign all or any portion of its rights hereunder to any Subsidiary of the Buyer; provided, further, that any assignment pursuant to the preceding proviso shall not relieve the Buyer of any obligation under this Agreement. Any conveyance, assignment or transfer made in violation of this Section 13.6 will be void ab initio.

 

13.7 Headings. The headings contained in this Agreement, the Exhibits and Schedules hereto and the table of contents hereof are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

 

13.8 Interpretation. The Parties acknowledge and agree that: (a) each Party and its counsel reviewed and negotiated the terms and provisions of this Agreement and each has contributed to its revision; (b) the rule of construction to the effect that any ambiguities are resolved against the drafting Party shall not be employed in the interpretation of this Agreement; and (c) the terms and provisions of this Agreement shall be construed fairly as to all Parties hereto, regardless of which Party was generally responsible for the preparation of this Agreement.

 

13.9 Severability. It is the desire and intent of the parties hereto that the provisions of this Agreement be enforced to the fullest extent permissible under the Laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any particular provision of this Agreement shall be adjudicated by a court of competent jurisdiction to be invalid, prohibited or unenforceable for any reason, such provision, as to such jurisdiction, shall be ineffective, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction. Notwithstanding the foregoing, if such provision could be more narrowly drawn so as not to be invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such pro vision

in any other jurisdiction.

 

13.10 Counterparts. This Agreement may be executed in any number of counterparts, and each such counterpart shall be deemed to be an original instrument, but all such counterparts together shall constitute one and the same agreement. This Agreement may be executed and delivered in counterpart signatures delivered via facsimile or other electronic transmission and any such counterpart so delivered shall be deemed to be an original instrument.

 

13.11 No Third Party Beneficiaries. Except as specifically provided in Article XI, this Agreement is for the sole benefit of the parties hereto and their permitted assigns and nothing in this Agr eement expressed or implied shall give or be construed to give to any Person, other than the parties hereto and such assigns, any legal or equitable rights under this Agreement.

 

13.12 Interest. If any Party defaults in the payment when due of any sum payable under this Agreement, the liability of such Party shall be increased to include interest on such sum from the date when such payment is due until the date of actual payment at the Applicable Rate.