<PAGE> 1
As filed with the Securities and Exchange Commission on January 6, 1997
Registration No. 333-_____________
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
RPM, INC.
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(Exact Name of Registrant as Specified in its Charter)
Ohio
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(State or Other Jurisdiction of Incorporation or Organization)
34-6550857
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(I.R.S. Employer Identification No.)
2628 Pearl Road, P.O. Box 777, Medina, Ohio 44258 Tel.: (330) 273-5090
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(Address, including Zip Code, and Telephone Number of Principal Executive
Offices)
<TABLE>
<S> <C>
Thomas C. Sullivan Copy to:
Chairman of the Board and Chief Executive Officer --------
RPM, Inc. William A. Papenbrock, Esq.
2628 Pearl Road Calfee, Halter & Griswold LLP
P.O. Box 777 1400 McDonald Investment Center
Medina, Ohio 44258 800 Superior Avenue
(330) 273-5090 Cleveland, Ohio 44114
(216) 622-8200
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(Name, Address including Zip Code, and Telephone Number of Agent for Service)
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after the effective date of the Registration Statement and in
compliance with applicable federal and state laws.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities are to be offered on a delayed or continuous
basis pursuant to Rule 415 under the Securities Act of 1933, other than
securities offered only in connection with dividend or interest reinvestment
plans, please check the following box: [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]_____________________
If this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]________________________
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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Proposed Proposed Amount of
Amount to be maximum offering price maximum aggregate registration
Title of shares to be registered registered per share (1) offering price (1) fee
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<S> <C> <C> <C> <C>
Common Shares, no par value............. 906,667 $16.9375 $15,356,673 $4,653.54
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<FN>
(1) Estimated in accordance with Rule 457(c) solely for the purpose of
calculating the registration fee and based upon the average of the high
and low sales price of the Common Stock of RPM, Inc. reported on the
Nasdaq National Market on January 3, 1997.
</TABLE>
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
SHALL DETERMINE.
<PAGE> 2
SUBJECT TO COMPLETION. DATED JANUARY 6, 1997
PROSPECTUS
RPM, INC.
---------
COMMON SHARES
(WITHOUT PAR VALUE)
This Prospectus relates to the offer and sale of _________ Common
Shares, without par value (the "Common Shares"), of RPM, Inc., an Ohio
corporation (the "Company"). All of the Common Shares being registered may be
offered and sold from time to time by a certain selling shareholder of the
Company. See "Selling Shareholder" and "Manner of Offering." The Company will
not receive any proceeds from the sale of the Common Shares.
The Company's Common Shares are traded on the Nasdaq National Market
under the symbol "RPOW." On January 3, 1997 the last reported sale price for
the Common Shares was $16.75 per share.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS
THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any state in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus (including the
material incorporated herein by reference) and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Company or by any other person deemed to be an underwriter. This
Prospectus does not constitute an offer to sell or a solicitation of an offer to
buy the shares covered by this Prospectus by anyone in any state in which such
offer or solicitation is not authorized or in which the person making such offer
or solicitation is not qualified to do so to anyone to whom it is unlawful to
make such offer or solicitation. Neither the delivery of this Prospectus nor any
sale made hereunder shall under any circumstances create an implication that
there has been no change in the affairs of the Company since the date hereof.
THE DATE OF THIS PROSPECTUS IS JANUARY 6, 1997
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
<PAGE> 3
THE COMPANY
RPM, Inc., an Ohio corporation, has its principal executive
offices at 2628 Pearl Road, P.O. Box 777, Medina, Ohio 44258, and its telephone
number is (330) 273-5090. As used in this Prospectus, the "Company" shall refer
to RPM, Inc. and its consolidated subsidiaries, unless the context indicates
otherwise.
RECENT DEVELOPMENTS
Acquisition of Marson Automotive Division
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The Company and its wholly owned subsidiary Bondo/Mar-Hyde
Corporation (the successor corporation to Dynatron/Bondo Corporation) entered
into an Asset Purchase Agreement, dated as of December 30, 1996 (the "Purchase
Agreement") with Marson Corporation, a Delaware corporation ("Marson") and
Marson's wholly owned Canadian subsidiary, Marson Canada Inc., a Canadian
corporation ("Marson Canada"). Pursuant to the Purchase Agreement, the Company
agreed to acquire substantially all of the assets and assume certain liabilities
(the "Acquisition") related to the business conducted by Marson and Marson
Canada as the Marson Automotive Division ("Marson Automotive") from Marson and
Marson Canada. Through Marson Automotive, Marson and Marson Canada manufacture,
distribute and market automotive paint, body and equipment products and
accessories to wholesale suppliers to the automotive service and repair industry
and to retail sellers to the do-it-yourself market. The completion of the
Acquisition is subject to customary conditions, including applicable
governmental approvals, and the concurrent effectiveness of this Registration
Statement under the Securities Act of 1933, as amended (the "Securities Act").
See "Selling Shareholder - Purchase Agreement."
Acquisition of Tremco, Inc.
- ---------------------------
Effective October 21, 1996, the Company and The B.F.
Goodrich Company, a New York corporation ("B.F. Goodrich"), entered into a Stock
Purchase Agreement for RPM to acquire substantially all of Tremco Incorporated,
an Ohio corporation and a B.F. Goodrich subsidiary ("Tremco"). Tremco
manufactures and sells roofing systems, sealants and coatings. Tremco is
headquartered in Cleveland and employs about 1,700 employees at office and
manufacturing locations in the United States, Canada, the United Kingdom, The
Netherlands and Australia, with offices in several other countries. The roofing
systems, sealants and coatings manufactured under the Tremco brand name are sold
to customers primarily in building, construction, building maintenance and
retail markets. Tremco had sales in 1995 of approximately $350 million. The
transaction is expected to be completed in the first quarter of 1997.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission") which may be inspected
and copied at the public reference facilities maintained by the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549. Such reports, proxy statements,
and information are also available for inspection and copying at the regional
offices of the Commission located at: 500 West Madison Street, Chicago, Illinois
60661; and Seven World Trade Center, 13th Floor, New York, New York 10007.
Copies of such material may also be obtained from the Public Reference Section
of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 upon payment
of prescribed rates. The Commission also maintains a Web site
(HTTP://WWW.SEC.GOV) that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission, including the Company.
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<PAGE> 4
INCORPORATION OF CERTAIN DOCUMENTS
AND INFORMATION BY REFERENCE
The Company hereby incorporates by reference into this
Prospectus the following documents heretofore filed by the Company with the
Commission pursuant to the Exchange Act: (a) the Company's Annual Report on Form
10-K for the fiscal year ended May 31, 1996; (b) the Company's Quarterly Report
on Form 10-K for the fiscal quarter ended August 31, 1996; and (c) the Company's
Current Report on Form 8-K dated October 21, 1996.
All documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination
of this offering shall be deemed to be incorporated by reference in this
Prospectus and to be a part hereof from the date of filing of such documents.
The Company will provide, without charge, to each person to
whom this Prospectus is delivered, upon the written or oral request of such
person, a copy of any and all of the information that has been incorporated by
reference in this Prospectus (not including exhibits to the information that is
incorporated by reference unless such exhibits are specifically incorporated by
reference into the information that this Prospectus incorporates). Such request
should be directed to: Paul A. Granzier, Esq., Secretary, RPM, Inc., 2628 Pearl
Road, P.O. Box 777, Medina, Ohio 44258, telephone (330) 273-5090.
SELLING SHAREHOLDER
The Common Shares covered by this Prospectus are being offered
and sold by the person listed below (the "Selling Shareholder"). The Company
intends to issue such Common Shares to the Selling Shareholder in connection
with the consummation of the Acquisition.
The following table shows the number of Common Shares owned by
the Selling Shareholder prior to this offering, the number of Common Shares
being registered hereby, and the number of Common Shares to be owned by the
Selling Shareholder after the completion of this offering:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
Common Shares Owned Common Shares
Prior To Offering Common Shares Owned After
Name of Selling Shareholder Registered Offering
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Marson Corporation, a Delaware corporation
("Marson") 906,667 906,667 (1) 0 (2)
- ------------------------------------------------------------------------------------------------------------------
<FN>
(1) Maximum number of shares to be sold by the Selling Shareholder. Subject to adjustment as provided in
the Purchase Agreement.
(2) Assumes the sale of all Common Shares registered hereunder.
</TABLE>
Purchase Agreement
- ------------------
Under the terms of the Purchase Agreement, the Company has
agreed to use its best efforts to file a registration statement with respect to
the potential resale of up to 906,667 Common Shares to be issued to the Selling
Shareholder (subject to adjustment as provided in the Purchase Agreement) and to
maintain the effectiveness of such registration statement for a period of 36
months from the date of this
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<PAGE> 5
Prospectus. All of the registration and qualification fees, printing and
accounting fees, and fees and disbursements of the Company's legal counsel
incurred in connection with the registration of the Common Shares will be paid
by the Company; provided, however, that any underwriters' discounts and
commissions and brokerage or dealer commissions will be borne by the Selling
Shareholder. The Common Shares may be offered and sold from time to time within
such 36-month period as determined by the Selling Shareholder.
MANNER OF OFFERING
The price and manner of sale of the Common Shares offered
hereunder are in the sole discretion of the Selling Shareholder. Sales of the
Common Shares covered by this Prospectus may be made by the Selling Shareholder,
or, subject to applicable law, by pledgees, donees, transferees or other
successors in interest, in over-the-counter market or otherwise at prices and at
terms then prevailing or at prices related to the then-current market price or
at prices and at terms determined in privately negotiated transactions. The
Common Shares may be sold through any of several methods, including by any one
or more of the following: (a) a block trade in which the broker or dealers so
engaged will attempt to sell the shares as agent but may position and resell a
portion of the block as principal to facilitate the transaction; (b) purchases
by a broker or dealer as principal and resale by such broker or dealer for its
account pursuant to this Prospectus; (c) ordinary brokerage transactions and
transactions in which the brokers solicits purchasers; and (d) privately
negotiated transactions. In effecting sales, brokers or dealers engaged by the
Selling Shareholder may arrange for other brokers or dealers to participate.
Brokers or dealers will receive commissions or discounts from the Selling
Shareholder in amounts to be negotiated immediately prior to sale. Such brokers
or dealers may be deemed to be "underwriters" within the meaning of the
Securities Act in connection with such sales. In addition, any Common Shares
covered by this Prospectus which qualify for sale pursuant to Rule 144 may be
sold under Rule 144 rather than pursuant to this Prospectus.
The Company has advised the Selling Shareholder of its
obligations under the Exchange Act to avoid market manipulation of the Common
Shares, including without limitation its obligation not to purchase or solicit
purchases by others of any of the Common Shares during the two business days
preceding the commencement of any offers or sales of the Common Shares by the
Selling Shareholder, until the offering pursuant to this Prospectus by the
Selling Shareholder has been completed.
The Company has also advised the Selling Shareholder of its
obligations under the Securities Act to deliver copies of this Prospectus to any
purchaser of their Common Shares.
DESCRIPTION OF COMMON SHARES
The following summary contains certain information regarding
the Company's Common Shares. This information is qualified in its entirety by
reference to the Company's Amended Articles of Incorporation, as amended (the
"Amended Articles"), and Chapter 1701 of the Ohio Revised Code.
The Company is incorporated under the laws of the State of
Ohio and its authorized capital stock consists of 200,000,000 Common Shares,
without par value. There were 77,471,058 shares outstanding as of August 23,
1996. All of the Common Shares of the Company to be sold by the Selling
Shareholder have been duly authorized and validly issued, and are fully paid and
nonassessable. Dividends, which may be declared at the discretion of the Board
of Directors of the Company, must be paid equally on all issued and outstanding
Common Shares out of funds legally available therefor. Upon liquidation, any
excess net assets after all payments of debts and costs must be paid to
shareholders in proportion to the number of Common Shares held. The Common
Shares are not subject to preemptive rights, conversion rights, redemption
provisions or sinking fund provisions.
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<PAGE> 6
The holder of each Common Share is entitled to one vote on all
matters submitted to shareholders generally, except that shareholders have the
right to cumulate their votes for the election of Directors as permitted by Ohio
law. The Board of Directors is divided into three Classes with the term of
office of one of such Classes expiring in each year. At each Annual Meeting of
Shareholders the successors to the Directors of the Class whose term is expiring
at that time are elected to hold office for a term of three years.
Classification of the Board of Directors increases the number of Common Shares
necessary under cumulative voting to elect a Director in any given year. Subject
to the provisions of Articles Seventh and Eighth of the Company's Amended
Articles, as hereinafter summarized, all matters submitted to a vote of
shareholders are determined by a vote of the holders of a majority of the
outstanding shares entitled to vote thereon present in person or by proxy at a
meeting at which the vote was taken.
Article Seventh of the Company's Amended Articles provides, in
essence, that proposals (i) with respect to a merger, consolidation or
acquisition wherein the existing shareholders of the Company would hold less
than two-thirds of the voting power of the Company, or of the surviving or new
corporation, immediately after consummation of the transaction, and (ii) with
respect to a sale of substantially all of the assets of the Company, both
require adoption or approval by holders of shares representing two-thirds of the
voting power of the Company.
Article Eighth of the Company's Amended Articles provides, in
essence, that the affirmative vote of the holders of shares representing at
least 80% of the voting power of the Company is required to effect a merger,
consolidation, sale, lease or exchange of substantially all of the assets of the
Company where the other party to the transaction, including its "affiliates" and
"associated persons," as defined, is a holder, directly or indirectly, of 5% or
more of the outstanding shares of any class of the Company entitled to vote at a
meeting called to consider such a proposed transaction, as of the record date
used to determine the shareholders entitled to vote upon such transaction. The
Board of Directors, acting in good faith, shall make a conclusive determination
as to whether the proposed transaction requires an 80% vote of shareholders. The
requirement for approval by an 80% vote shall not be applicable to proposals
which received the formal approval of the Board of Directors of the Company
prior to the acquisition of the 5% share interest by the other party, provided
that with respect to any proposed transaction as to which the 80% voting
requirement would otherwise be applicable there also has been a disclosure to
all shareholders of any inducements in connection with the proposed transaction
offered to officers and Directors of the Company which are not extended to all
shareholders.
Ohio Law
- --------
As an Ohio corporation, the Company is subject to certain
provisions of Ohio law which may discourage or render more difficult an
unsolicited takeover of the Company. Among these are provisions that (i)
prohibit certain mergers, sales of assets, issuances or purchases of securities,
liquidation or dissolution, or reclassifications of the then outstanding shares
of an Ohio corporation involving certain holders of stock representing 10% or
more of the voting power, unless such transactions are either approved by the
Directors in office prior to the 10% shareholder becoming such or involve a 10%
shareholder which has been such for at least three years and certain
requirements related to the price and form of consideration to be received by
shareholders are met; and (ii) provide Ohio corporations with the right to
recover profits realized under certain circumstances by persons engaged in
"greenmailing" or who otherwise sell securities of a corporation within 18
months of proposing to acquire such corporation.
In addition, pursuant to Section 1701.831 of the Ohio Revised
Code, the purchase of certain levels of voting power of the Company (one-fifth
or more, one-third or more, or a majority) can be made only with the prior
authorization of the holders of shares representing at least a majority of the
total voting power of the Company and the separate prior authorization of the
holders of shares representing at least a majority of the voting power held by
shareholders other than the proposed purchaser, officers of the Company and
Directors of the Company who are also employees.
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<PAGE> 7
VALIDITY OF SHARES
The validity of the Common Shares offered hereby will be
passed upon by Calfee, Halter & Griswold LLP, 1400 McDonald Investment Center,
800 Superior Avenue, Cleveland, Ohio 44114-2688, outside counsel to the Company.
William A. Papenbrock, a partner of Calfee, Halter & Griswold LLP, is a Director
of the Company, and as of November 30, 1996 beneficially owned 11,647 Common
Shares of the Company.
EXPERTS
The consolidated financial statements of the Company included
in its Annual Report on Form 10-K for the fiscal year ended May 31, 1996 have
been examined by Ciulla, Smith & Dale LLP, independent public accountants, as
set forth in their report included therein and incorporated herein by reference.
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<PAGE> 8
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
- -----------------------------------------------------
The following table sets forth the estimated expenses payable
by the Registrant in connection with the sale and distribution of the Common
Shares registered hereby:
<TABLE>
<S> <C>
SEC Registration Fee.............................. $ 4,654
Fees and Expenses of Counsel...................... 7,500
Miscellaneous..................................... 1,846
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TOTAL.................................... $14,000
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
- ---------------------------------------------------
Ohio Revised Code section 1701.13(E) provides that a
corporation may indemnify or agree to indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, by reason of the fact that he or she is or was a Director, officer,
employee or agent of the corporation, or is or was serving at the request of the
corporation in a similar capacity with another corporation or other enterprise,
against expenses actually incurred by such person in connection with an action
if he or she acted in good faith and in a manner not opposed to the best
interests of the corporation. Article VI of the Registrant's Amended Code of
Regulations provides for the indemnification of Directors and officers against
certain liabilities, to the maximum amount permitted by Ohio law. A copy of the
Registrant's Amended Code of Regulations is filed as Exhibit 4.2 to the
Registration Statement and is incorporated herein by reference thereto.
The Registrant has purchased a Directors and Officers
Liability Insurance Policy, which insures the Directors and officers of the
Company against certain liabilities incurred in the performance of their duties.
As of July 20, 1990, the Registrant entered into
Indemnification Agreements with each of its Directors and executive officers
providing for additional indemnification protection beyond that provided by the
Directors and Officers Liability Insurance Policy. A copy of the Form of
Indemnification Agreement is filed as Exhibit 99.1 and is incorporated herein by
reference thereto. In the Indemnification Agreements, the Registrant has agreed,
subject to certain exceptions, to indemnify and hold harmless the Director or
executive officer to the maximum extent then authorized or permitted by the
provisions of the Company's Code of Regulations, the Ohio Revised Code, or by
any amendment(s) thereto.
The Asset Purchase Agreement, dated as of December 30, 1996,
by and among the Registrant, the Registrant's subsidiary Bondo/Mar-Hyde
Corporation (the successor corporation to Dynatron/Bondo Corporation), and the
Selling Shareholder and a subsidiary of the Selling Shareholder, provides that
the Selling Shareholder will, in connection with any Registration Statement
filed by the Registrant on behalf of such Selling Shareholder, indemnify the
Registrant, its Directors, officers, each person, if any, who controls the
Registrant and each agent of the Registrant (within the meaning of the
Securities Act) against certain liabilities arising out of the Registration
Statement and the related Prospectus. Such Asset Purchase Agreement is filed as
Exhibit 4.4 to this Registration Statement and is incorporated herein by
reference thereto.
II-1
<PAGE> 9
ITEM 16. EXHIBITS.
- ------------------
See the Exhibit Index at page E-1 of this Registration
Statement.
ITEM 17. UNDERTAKINGS.
- ----------------------
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement
(or the most recent post-effective date thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration
Statement.
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the Registration Statement or any material change to such
information in the Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the Registration Statement is on Form S-3, Form S-8, or Form
F-3, and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
with or furnished to the Commission by the Registrant pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to Section 13(a) or 15(d) or
the Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated in the Registration
Statement by reference shall be deemed to be a new
II-2
<PAGE> 10
Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
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<PAGE> 11
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Cleveland, State of Ohio, on January 6, 1997.
RPM, INC.
By: /s/ Thomas C. Sullivan
------------------------------------------
Thomas C. Sullivan, Chairman of the Board
and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below, hereby constitutes and appoints Thomas C. Sullivan,
James A. Karman, Frank C. Sullivan, Paul A. Granzier, William A. Papenbrock, and
Edward W. Moore, or any one of them, his or her true and lawful
attorneys-in-fact and agents, each with full power of substitution and
resubstitution for him or her in his or her name, place and stead, in any and
all capacities, to sign any or all amendments or post-effective amendments to
this Registration Statement, and to file the same, with exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto such attorneys-in-fact and agents, or any of them,
full power and authority to do and perform each and every act and thing
requisite and necessary in connection with such matters and hereby ratifying and
confirming all that each of such attorneys-in-fact and agents or his or her
substitute or substitutes may do or cause to be done by virtue hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933,
THIS REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN
THE CAPACITIES INDICATED ON THE 6th DAY OF JANUARY, 1997.
Signature Title
- --------- -----
/s/ Thomas C. Sullivan Chairman of the Board of Directors and Chief Executive
- ---------------------- Officer (Principal Executive Officer)
Thomas C. Sullivan
/s/ James A. Karman President and Chief Operating Officer and a Director
- ---------------------
James A. Karman
/s/ Frank C. Sullivan Executive Vice President and Chief Financial
- --------------------- Officer (Principal Financial Officer) and a Director
Frank C. Sullivan
/s/ Glenn R. Hasman Vice President--Administration (Principal Accounting
- --------------------- Officer)
Glenn R. Hasman
/s/ Max D. Amstutz Director
- --------------------
Max D. Amstutz
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<PAGE> 12
Signature Title
- --------- -----
/s/ Edward B. Brandon Director
- -------------------------
Edward B. Brandon
/s/ Lorrie Gustin Director
- -------------------------
Lorrie Gustin
/s/ E. Bradley Jones Director
- -------------------------
E. Bradley Jones
/s/ Donald K. Miller Director
- -------------------------
Donald K. Miller
/s/ John H. Morris, Jr. Executive Vice President and a Director
- -------------------------
John H. Morris, Jr.
/s/ Kevin O'Donnell Director
- -------------------------
Kevin O'Donnell
/s/ William A. Papenbrock Director
- -------------------------
William A. Papenbrock
/s/ Albert B. Ratner Director
- -------------------------
Albert B. Ratner
575/06821/06821BCF.400
II-5
<PAGE> 13
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NUMBER DESCRIPTION OF DOCUMENT NUMBER
- ------- ----------------------- ----------
<S> <C> <C>
4.1 Amended Articles of Incorporation of the Company.
4.2 Amended Code of Regulations of the Company is incorporated
herein by reference to Exhibit 3.2 of the Company's Annual
Report on Form 10-K for the period ended May 31, 1996.
4.3 Specimen certificate of Common Shares, without par value, of
the Company is incorporated herein by reference to Exhibit
4.1 of the Company's Annual Report on Form 10-K for the
period ended May 31, 1996.
4.4 Asset Purchase Agreement among Bondo/Mar-Hyde Corporation (the
successor corporation to Dynatron/Bondo Corporation), an Ohio
corporation, as Buyer, the Company and Marson Corporation, a
Delaware corporation and Marson Canada Inc., a Canadian
corporation, as Sellers.
5.1 Opinion of Calfee, Halter & Griswold LLP as to the validity
of the Common Shares being offered.
23.1 Consent of Ciulla, Smith & Dale, LLP, independent Auditors of
the Company.
23.2 Consent of Calfee, Halter & Griswold LLP (included in Exhibit
5.1).
99.1 Form of Indemnification Agreement between the Company and
each of its Directors and executive officers is incorporated
herein by reference to Exhibit 10.12 of the Company's Annual
Report on Form 10-K for the period ended May 31, 1996.
</TABLE>
E-1
<PAGE> 1
EXHIBIT 4.1
RECEIPT AND CERTIFICATE
RPM, INC. formerly REPUBLIC POWDERED METALS, INC.
- -------------------------------------------------
NAME
202203
------
NUMBER
<TABLE>
<S> <C>
DOMESTIC CORPORATIONS MISCELLANEOUS FILINGS
ARTICLES OF INCORPORATION ANNEXATION/INCORPORATION--CITY
OR VILLAGE
AMENDMENT
MERGER/CONSOLIDATION RESERVATION OF CORPORATE NAMES
DISSOLUTION REGISTRATION OF NAME
AGENT REGISTRATION OF NAME RENEWALS
RE-INSTATEMENT REGISTRATION OF NAME--CHANGE
OF REGISTRANTS ADDRESS
CERTIFICATES OF CONTINUED
EXISTENCE TRADE MARK
MISCELLANEOUS TRADE MARK RENEWAL
SERVICE MARK
FOREIGN CORPORATIONS SERVICE MARK RENEWAL
MARK OF OWNERSHIP
LICENSE
MARK OF OWNERSHIP RENEWAL
AMENDMENT
EQUIPMENT CONTRACT/CHATTEL
SURRENDER OF LICENSE MORTAGE
APPOINTMENT OF AGENT
POWER OF ATTORNEY
CHANGE OF ADDRESS OF AGENT
SERVICE OF PROCESS
CHANGE OF PRINCIPAL OFFICE
MISCELLANEOUS
RE-INSTATEMENT
ASSIGNMENT--TRADE MARK, MARK
FORM 7 OF OWNERSHIP, SERVICE MARK,
PENALTY REGISTRATION OF NAME
</TABLE>
I certify that the attached document was received and filed in the
office of TED W. BROWN, Secretary of State, at Columbus, Ohio, on the 9th
------
day of November A.D. 1971, and recorded on Roll B772 at Frame 725 of
-------------- -- ---- ---
the RECORDS OF INCORPORATION and MISCELLANEOUS FILINGS.
/s/ TED W. BROWN
-----------------------
TED W. BROWN,
Secretary of State
Filed by and Returned To: Calfee, Halter, Calfee, Griswold & Sommer
-----------------------------------------------
1800 Central Nztional Bank Building
-----------------------------------------------
Cleveland, Ohio 44114 Att: Richard N. Ogle
-----------------------------------------------
FEE RECEIVED: $1275.00
NAME: RPM, INC. formerly REPUBLIC POWDERED METALS, INC.
-------------------------------------------------
<PAGE> 2
CERTIFICATION OF ADOPTION OF
AMENDED ARTICLES OF INCORPORATION OF
REPUBLIC POWDERED METALS, INC.
(hereafter to be known as RPM, Inc.)
Charter No. 202203
Thomas C. Sullivan, President, and Louis J. Gillich, Secretary of
Republic Powdered Metals, Inc. an Ohio corporation, do hereby certify that a
meeting of the holders of all of the shares of Republic Powdered Metals, Inc.
was duly called and held on the 20th day of October, 1971, at which meeting a
quorum of such shareholders was present in person or by proxy at all times, and
that by the affirmative vote of the holders of shares entitling them to
exercise more than eighty percent (80%) of the voting power of said corporation
the Resolutions attached hereto were adopted for the purpose of adopting the
attached Amended Articles of Incorporation of said corporation.
IN WITNESS WHEREOF, said Thomas C. Sullivan, President and
Louis J. Gillich, Secretary of Republic Powdered Metals, Inc., acting for
and on behalf of said corporation have hereunto subscribed their names this
9th day of November, 1971.
- ---
/s/ Thomas C. Sullivan
---------------------------------
Thomas C. Sullivan, President
/s/ Louis J. Gillich
---------------------------------
Louis J. Gillich, Secretary
<PAGE> 3
RESOLUTIONS ADOPTED AT
SPECIAL MEETING OF SHAREHOLDERS OF
REPUBLIC POWDERED METALS, INC.
October 20, 1971
----------------------------------
"RESOLVED, That new Amended Articles of Incorporation of this Corporation in
the form in which the same were communicated to the shareholders of this
Corporation as Exhibit A to the Proxy Statement dated September 30, 1971, which
accompanied the Notice of this Meeting, and as attached to these Resolutions as
Exhibit A, be and the same are hereby adopted to supersede and take the place
of the Corporation's existing Amended Articles of Incorporation.
"BE IT FURTHER RESOLVED, That the President and the Secretary of this
Corporation be and they are hereby authorized and directed to file as promptly
as possible in the Office of the Secretary of State of Ohio an appropriate
Certificate of Adoption of Amended Articles of Incorporation and to take such
other action as may be appropriate in order to render effective said Amended
Articles of Incorporation and carry out the purpose of these Resolutions."
<PAGE> 4
AMENDED ARTICLES OF INCORPORATION
OF
RPM, INC.
(Formerly Republic Powered Metals, Inc.)
FIRST: The name of the Corporation is RPM, Inc.
SECOND: The place in the State of Ohio where its principal office is
located is Brunswick Hills Township, in Medina County.
THIRD: The purpose or purposes of the Corporation are as follows:
(a) To manufacture, compound, mix, buy, sell and otherwise
deal in paints, enamels, varnishes, shellacs, lacquers and protective
and decorative coatings and coverings of every kind and description,
together with every kind and variety of ingredients thereof, and, in
general, to manufacture, purchase, use and sell goods, wares and
merchandise of every kind and description.
(b) To purchase, acquire, apply for, register, hold, use,
hypothecate, exchange, assign, lease, grant licenses or sublicenses in
respect of, sell, deal in, and dispose of letters patent of the United
States or any foreign country, patent rights, privileges, inventions,
improvements, processes, designs, formulae, copyrights, trademarks,
trade names, and rights analogous thereto, necessary, useful, or
convenient in connection with any business of the Corporation.
(c) To purchase, lease or otherwise acquire, own, hold, use,
maintain, operate, develop, sell, lease, encumber, convey, exchange or
otherwise dispose of real and personal property, or interests therein,
and to construct, equip, occupy, improve, use, operate, sell, lease,
exchange or otherwise dispose of buildings, factories, plants,
storehouses, offices and structures of all kinds, necessary, useful, or
convenient in connection with any business of the Corporation.
(d) To purchase or otherwise acquire all or any part of the
business, good will, rights, property and assets and to assume all or
any part of the liabilities of any corporation, association,
partnership or individual engaged in any business in which any
corporation organized under the General Corporation Act of the State of
Ohio is entitled to engage.
(e) To acquire by purchase, subscription, exchange, or otherwise,
to guarantee, to invest in or hold for investment or otherwise, and to
trade, deal in and with, use, sell, pledge, or otherwise dispose of the
stock, bonds, and other evidences of indebtedness or obligations of any
corporation, domestic or foreign, and to issue in exchange or in
payment therefor its own stock, bonds, or other evidences of
indebtedness, and, while owner of any such stock, bonds, and evidences
of indebtedness, to possess and exercise all the rights, powers and
privileges of ownership, including the right to vote thereon for any
and all purposes; to acquire by purchase, subscription, exchange, or
otherwise and to deal in and with, use, sell, pledge or otherwise
dispose of the bonds and other evidences of indebtedness or obligations
of any public or municipal corporation, domestic or foreign, and of any
government, state, governmental authority, or governmental
1
<PAGE> 5
subdivision, domestic or foreign; and to do any and all acts or things
deemed advisable for the preservation, protection, improvement, or
enhancement in value of any stock; bonds, or other evidences of
indebtedness or securities, and to do any and all acts and things
designed to accomplish any such purpose.
(f) To join, merge, or consolidate with and to enter into
agreements and cooperative relations, not in contravention of law, with
any corporation, association, partnership, or individual in and about
the carrying out of all or any of its purposes.
(g) To borrow money or otherwise use its credit for its corporate
purposes; to make, accept, endorse, execute, and issue promissory
notes, bills of exchange, bonds, debentures, and other obligations and
evidences of indebtedness; and to secure the payment of any such
obligations by mortgage, pledge, deed of trust, or otherwise.
(h) In general, to carry on any lawful business whatsoever in
connection with or incidental to the foregoing, or which has for its
object the promotion, directly or indirectly, of the general interests
of the Corporation, or the protection, improvement, preservation, or
enhancement of the value of its properties and rights, and to do
whatever it may deem necessary, useful, convenient, or proper for the
accomplishment of any one or more of the purposes of the Corporation,
and, to the same extent and as fully as any natural person might
lawfully or could do, to do all and every lawful act and thing and to
enter into and perform contracts of every kind and description with any
person, firm, association, corporation, municipality, county, state,
body politic, or government, or subdivision thereof, without limitation
as to amount, necessary, suitable, or convenient for the accomplishment
of any of the purposes of the Corporation or incident to any of the
powers hereinbefore enumerated, the enumeration of specific powers not
being a limitation or restriction in any manner of the general powers
of the Corporation.
(i) To do all or any of such acts and things and exercise any of
such powers in any state of the United States, in any district,
territory, colony, protectorate, or possession thereof, and in any and
all foreign countries, and to maintain such offices, branches, plants,
properties, and establishments in any or all thereof as may be deemed
advisable by the Corporation.
FOURTH: The maximum number of shares which the Corporation is
authorized to have outstanding is Two Million (2,000,000) shares, all of which
shall be Common Shares, without par value.
FIFTH: The Corporation, by action of its Directors and without action
by its shareholders, may purchase its own shares in accordance with the
provisions of the General Corporation Law of Ohio. Such purchases may be made
either in the open market or at public or private sale, in such manner and
amounts, from such holder or holders of outstanding shares of the Corporation,
and at such prices as the Directors shall from time to time determine.
SIXTH: No holder of shares of the Corporation of any class, as such,
shall have any preemptive right to purchase or subscribe for shares of the
Corporation, of any class, or other securities of the Corporation, of any
class, whether now or hereafter authorized.
SEVENTH: Notwithstanding any provisions of the laws of the State of
Ohio now or hereafter in force requiring for any action the affirmative vote of
the holders of shares entitling them to exercise a
2
<PAGE> 6
designated proportion (but less than all) of the voting power of the
Corporation or of any class or classes of shares thereof, such action may be
taken by the affirmative vote of the holders of shares entitling them to
exercise a majority of the voting power of the Corporation or of such class or
classes, except that affirmative vote of the holders of shares entitling them
to exercise two-thirds of the voting power of the Corporation or of such class
or classes shall be necessary:
(a) to approve the lease, sale, exchange, transfer or other
disposition by the Corporation of all, or substantially all, of its
assets; or
(b) to effect a merger, consolidation, majority share acquisition
or combination other than a combination to which subparagraph (a) of
this Article Seventh applies, as such terms are defined under the
General Corporation Law of Ohio, if the holders of shares of the
Corporation entitling them to exercise all of the voting power of the
Corporation in the election of Directors immediately prior to
consummation of such transaction shall, upon consummation thereof,
thereafter be entitled to exercise less than two-thirds of the voting
power of the Corporation, or of the surviving or new corporation (in
the case of a merger or consolidation), in the election of Directors;
or
(c) to adopt any amendment to the Amended Articles of
Incorporation of the Corporation which changes the provisions of this
Article Seventh.
EIGHTH: These Amended Articles of Incorporation supersede and take the
place of the existing Amended Articles of Incorporation of the Corporation.
3
<PAGE> 7
THE STATE OF OHIO
[LOGO]
DEPARTMENT OF STATE
TED W. BROWN
Secretary of State
CERTIFICATE
202203
IT IS HEREBY CERTIFIED that the Secretary of State of Ohio has custody of the
Records of Incorporation and Miscellaneous Filings; that said records show the
filing and recording of: AMD AGS CHL of RPM, Inc.
---------------
UNITED STATES OF AMERICA Recorded on Roll E014 at Frame 1849 of the
STATE OF OHIO ---- ----
Office of the Secretary of State Records of Incorporation and Miscellaneous
Filings
[SEAL] Witness my hand and the seal of the Secretary of
State, at the City of Columbus, this 29TH day of
OCTOBER, A.D. 1974
/s/ TED W. BROWN
----------------------
TED W. BROWN
Secretary of State
<PAGE> 8
CERTIFICATE OF AMENDMENT TO
AMENDED ARTICLES OF INCORPORATION OF
RPM, INC.
Charter No. 202203
Thomas C. Sullivan, President, and James A. Karman, Secretary,
of RPM, Inc., an Ohio corporation, do hereby certify that a meeting of the
holders of all of the common shares of RPM, Inc. was duly called and held on the
27th day of September, 1974, at which meeting a quorum of such shareholders was
present in person or by proxy at all times, that by the affirmative vote of the
holders of shares entitling them to exercise more than two-thirds (2/3) of the
voting power of said corporation the Resolutions attached hereto as Exhibit A
were adopted for the purpose of amending Articles SECOND and SEVENTh, inserting
a new Article EIGHTH and renumbering existing Article EIGHTH as Article NINTH,
of the Amended Articles of Incorporation of said corporation, and that as a
result of said action said Articles SECOND, SEVENTH, EIGHTH and NINTH shall
henceforth read in their entirety as set forth in Exhibit B attached hereto.
IN WITNESS WHEREOF, said Thomas C. Sullivan, President and
James A. Karman, Secretary, of RPM, Inc., acting for and on behalf of said
corporation, have hereunto subscribed their names this 21st day of October,
1974.
/s/ Thomas C. Sullivan
-----------------------------
Thomas C. Sullivan, President
/s/ James A. Karman
-----------------------------
James A. Karman, Secretary
<PAGE> 9
SHAREHOLDER RESOLUTIONS
RPM, INC.
RESOLVED: That Article Second of the Company's Amended Articles of Incorporation
be amended to read as set forth in Exhibit B to the Proxy Statement dated August
20, 1974 which accompanied the Notice of this Meeting, the relevant portion of
which Exhibit is incorporated into these resolutions by reference.
BE IT FURTHER RESOLVED: That the President and the Secretary of the Company be
and they are hereby authorized and directed to file promptly in the Office of
the Secretary of State of Ohio an appropriate Certificate of Amendment, and to
take such other action as may be appropriate, in order to render effective the
foregoing amendment and carry out the purpose of these resolutions.
RESOLVED: That Article Seventh of the Company's Amended Articles of
Incorporation be amended in the manner and to the extent indicated in Exhibit B
to the Proxy Statement dated August 20, 1974 which accompanied the Notice of
this Meeting, the relevant portions of which Exhibit are incorporated by
reference into these resolutions, that a new Article Eighth to the Company's
Amended Articles of Incorporation as set forth in said Exhibit be adopted, and
that the provision of said Amended Articles heretofore designated as Article
Eighth be redesignated as Article Ninth.
BE IT FURTHER RESOLVED: That the President and the Secretary of the Company be
and they are hereby authorized and directed to file as promptly as possible in
tile Office of the Secretary of State of Ohio an appropriate Certificate of
Amendment, and to take such other action as may be appropriate, in order to
render effective the foregoing amendments and carry out the purpose of these
resolutions.
<PAGE> 10
ARTICLES SECOND, SEVENTH, EIGHTH AND NINTH
TO
AMENDED ARTICLES OF INCORPORATION
OF
RPM, INC.
SECOND: The place in the State of Ohio where its principal
office is located is the City of Cleveland, Cuyahoga County.
SEVENTH: Notwithstanding any provisions of the laws of the State
of Ohio now or hereafter in force requiring for any action the affirmative vote
of the holders of shares entitling them to exercise a designated proportion (but
less than all) of the voting power of the Corporation or of any class or classes
of shares thereof, and subject to the requirements of Article Eighth of these
Amended Articles of Incorporation, such action may be taken by the affirmative
vote of the holders of shares entitling them to exercise a majority of the
voting power of the Corporation or of such class or classes, except that the
affirmative vote of the holders of shares entitling them to exercise two-thirds
of the voting power of the Corporation or of such class or classes shall be
necessary:
(a) to approve the lease, sale, exchange, transfer or other
disposition by the Corporation of all, or substantially all, or its
assets; or
(b) to effect a merger, consolidation, majority share
acquisition or combination other than a combination to which sub-paragraph (a)
of this Article Seventh applies, as such terms are defined under the General
Corporation law of Ohio, if the holders of shares of the Corporation entitling
them to exercise all of the voting power of the Corporation in the election of
Directors immediately prior to consummation of such transaction shall, upon
consummation thereof, thereafter be entitled to exercise less than two-thirds of
the voting power of the Corporation, or of the surviving or new Corporation (in
the case of a merger or consolidation), in the election of Directors; or
(c) to adopt any amendment to the Amended Articles of In-
corporation of the Corporation which changes the provisions of this Article
Seventh.
<PAGE> 11
EIGHTH: If a shareholder vote is required by law, then except as
provided in the last paragraph of this Article Eighth the affirmative vote of
the holders of shares entitling them to exercise 80% of the voting power of the
Corporation, given in person or by proxy at a meeting called for the purpose,
shall be necessary:
(a) to approve the lease, sale, exchange, transfer or other
disposition by the Corporation of all, or substantially all, of its assets or
business to a related company or an affiliate of a related company; or the
consolidation of the Corporation with or its merger into a related company or an
affiliate of a related company; or the merger into the Corporation or a
subsidiary of the Corporation of a related company or an affiliate of a related
company; or a combination or majority share acquisition in which the Corporation
is the acquiring corporation and its voting shares are issued or transferred to
a related company or an affiliate of a related company or to shareholders of a
related company or an associated person; or
(b) to approve any agreement, contract or other arrangement with
a related company or an affiliate of a related company or an associated person
providing for any of the transactions described in sub-paragraph (a) above; or
(c) to adopt any amendment of the Amended Articles of
Incorporation of the Corporation which changes the provisions of this Article
Eighth.
For the purpose of this Article Eighth, a "related company" in
respect of a given transaction shall be any person, partnership, corporation or
firm which, together with its affiliates and associated persons, owns of record
or beneficially, directly or indirectly, 5% or more of the shares of any
outstanding class of shares of the Corporation entitled to vote upon such
transaction, as of the record date used to determine the shareholders of the
Corporation entitled to vote upon such transaction; an "affiliate" of a related
company shall be any person, individual, joint venture, trust, partnership or
corporation which, directly or indirectly, through one or more intermediaries,
controls, or is controlled by, or is under common control with, the related
company; an "associated person" of a related company shall be any Officer or
Director or any beneficial owner, directly or indirectly, of 10% or more of any
class of equity security of such related company or any of its affiliates; and
the terms "person", "combination" , "majority share acquisition" and "acquiring
corporation" shall have the same meaning as that contained in Section 1701.01 of
the Ohio General Corporation Law or any similar provision hereafter enacted. The
determination of the Board of Directors of the Corporation, based on information
known to the Board of Directors and made in good faith, shall be conclusive as
to whether any person, partnership, corporation or firm is a related company or
affiliate or associated person as defined in this Article Eighth.
-2-
<PAGE> 12
The provisions of this Article Eighth shall not apply to any
proposal submitted to shareholders if (i) such proposal has been approved and
recommended by written resolution of the Board of Directors of the Corporation
adopted prior to the acquisition of the 5% interest in shares of the
Corporation, as aforesaid, by the related company or its affiliates or
associated persons, and (ii) with respect to any transaction of the type
described in subparagraphs (a) and (b) of this Article Eighth, the terms of any
inducements made to officers or Directors of the Corporation, if any, which are
not made available to all shareholders, have been disclosed to all shareholders.
NINTH: These Amended Articles of Incorporation supersede
and take the place of existing Amended Articles of Incorporation of the
Corporation.
-3-
<PAGE> 13
UNITED STATES OF AMERICA, |
STATE OF OHIO, }
OFFICE OF THE SECRETARY OF STATE. |
I, TED W. BROWN,
Secretary of State of the State of Ohio, do hereby certify that the foregoing
is an exemplified copy, carefully compared by me with the original record now
in my official custody as Secretary of State, and found to be true and correct,
of the
CERTIFICATE OF AMENDMENT
TO
AMEND ARTICLES OF INCORPORATION
OF
RPM, INC.
filed in this office on the 24th day of September A.D. 1976.
and recorded on (in) Roll (Volume) E 0198, Frame (Page) 0710 of
the Records of Incorporations.
[SEAL] WITNESS my hand and official seal at
Columbus, Ohio, this 29th day
of September A.D. 1976.
/S/ TED W. BROWN
----------------------
TED W. BROWN
Secretary of State
<PAGE> 14
CERTIFICATE OF AMENDMENT
TO
AMENDED ARTICLES OF INCORPORATION
OF
RPM, INC.
Charter No. 202203
Thomas C. Sullivan, Presidcnt, and James A. Karman, Secretary, of RPM,
Inc., an Ohio corporation, do hereby certify that a meeting of the holders of
all the Common Shares, without par value, of RPM, Inc. was duly called and held
on September 24, 1976, at which meeting a quorum of such Shareholders was
present in person or by proxy at all times, and that by the affirmative vote of
the holders of shares entitling them to exercise a majority of the voting power
of said corporation, the following Resolutions were adopted for the purpose of
amending Article FOURTH of the Amended Articles of Incorporation of said
corporation:
RESOLVED, That Article FOURTH of the Company's Amended Articles of
Incorporation be amended in its entirety to read as follows:
FOURTH: The maximum number of shares which the
Corporation is authorized to have outstanding is Five
Million (5,000,000) shares, all of which shall be Common
Shares, without par value.
BE IT FURTHER RESOLVED, That the President and the Secretary of the
Company be and they are hereby authorized and directed to file promptly in
the Office of the Secretary of State of Ohio an appropriate Certificate of
Amendment, and to take such other action as may be appropriate, in order to
render effective the foregoin g amendment and carry out the purposes of
these Resolutions.
<PAGE> 15
IN WITNESS WHEREOF, said Thomas C. Sullivan, President, and James A.
Karman, Secretary, of RPM, ILnc., acting for and on behalf of said corporation,
have hereunto subscribed their names this 24th day of September, 1976.
/s/ Thomas C. Sullivan
------------------------------------
Thomas C. Sullivan, President
/s/ James A. Karman
------------------------------------
James A. Karman, Secretary
(SEAL)
<PAGE> 16
UNITED STATES OF AMERICA, |
STATE OF OHIO, }
OFFICE OF THE SECRETARY OF STATE. |
I, TED W. BROWN,
Secretary of State of the State of Ohio, do hereby certify that the foregoing
is an exemplified copy, carefully compared by me with the original record now
in my official custody as Secretary of State, and found to be true and correct,
of the
CERTIFICATE OF AMENDMENT
TO ARTICLES OF INCORPORATION
OF
RPM, INC.
filed in this office on the 30th day of September A.D. 1977.
and recorded on (in) Roll (Volume) E 0324, Frame (Page) 0608 of
the Records of Incorporations.
[SEAL] WITNESS my hand and official seal at
Columbus, Ohio, this 4th day
of October A.D. 1977.
/S/ TED W. BROWN
----------------------
TED W. BROWN
Secretary of State
<PAGE> 17
CERTIFICATE OF AMENDMENT
TO
AMENDED ARTICLES OF INCORPORATION
OF
RPM, INC.
Charter No. 202203
Thomas C. Sullivan, President, and James A. Karman, Secretary, of RPM,
Inc., an Ohio corporation, do hereby certify that a meeting of the Shareholders
of RPM, Inc. was duly called and held on September 29, 1977, at which meeting a
quorum of such Shareholders was present in person or by proxy at all times, and
that by the affirmative vote of the holders of shares entitling them to exercise
a majority of the voting power of said corporation, the following resolutions
were adopted for the purpose of amending Article FOURTH of the Amended Articles
of Incorporation of said corporation:
RESOLVED, That Article FOURTH of the Company's Amended Articles of
Incorporation be amended to read in its entirety as follows:
FOURTH: The maximum number of shares which the Corporation is
authorized to have outstanding is Ten Million (10,000,000) shares, all
of which shall be Common Shares, without par value.
BE IT FURTHER RESOLVED, That the President and the Secretary of the
Company be and they are hereby authorized and directed to file promptly in
the Office of the Secretary of State of Ohio an appropriate Certificate of
Amendment, and to take such other action as may be appropriate, in order to
render effective the foregoing amendment and carry out the purposes of
these resolutions.
IN WITNESS WHEREOF, said Thomas C. Sullivan, President, and James A.
Karman, Secretary, of RPM, Inc., acting for and on behalf of said corporation,
have hereunto subscribed their names this 29th day of September, 1977.
/s/ Thomas C. Sullivan
-----------------------------
Thomas C. Sullivan, President
/s/ James A. Karman
-----------------------------
James A. Karman, Secretary
(SEAL)
<PAGE> 18
CERTIFICATE OF AMENDMENT
TO
AMENDED ARTICLES OF INCORPORATION
OF
RPM, Inc.
Charter No. 202203
James A. Karman, President, and Julius K. Nemeth, Secretary, of RPM,
Inc., an Ohio corporation, do hereby certify that a meeting of the Shareholders
of RPM, Inc. was duly called and held on October 13, 1983, at which meeting a
quorum of such Shareholders was present in person or by proxy at all times, and
that by the affirmative vote of the holders of shares entitling them to exercise
a majority of the voting power of said corporation, the following resolutions
were adopted for the purpose of amending Article FOURTH of the Amended Articles
0oe Incorporation of said corporation:
RESOLVED, That Article FOURTH of the Company's Amended Articles
of Incorporation be amended to read in its entirely as follows:
FOURTH: The maximum number of shares which the Corporation is
authori:ed to have outstanding is Twenty Million (20,000,000) shares, all of
which shall be Common Shares, without par value.
BE IT FURTHER RESOLVED, That the President and the Secretary of
the Company be and they are hereby authorized and directed to file promptlv in
the Office of the Secretary of State of Ohio an appropriate Certificate of
Amendment, and to take such other action as may be appropriate, in order to
render effective the foregoing amendment and carry out the purposes of these
resolutions.
IN WITNESS WHEREOF, said James A. Karman, President, and Julius K.
Nemeth, Secretary, of RPM, Inc., acting for and on behalf of said corporation,
have hereunto subscribed their names this 13th day of October, 1983.
/s/ James A. Karman
------------------------------
James A. Karman, President
/s/ Julius K. Nemeth
------------------------------
Julius K. Nemeth, Secretary
(SEAL)
<PAGE> 19
STATE OF OHIO SHERROD BROWN
[LOGO] DEPARTMENT OF STATE Secretary of State
DATE 10/16/86 NUMBER 202203 RECEIPT NO. 32650
G016-1993 0059
RECEIVED OF CALFEE, HALTER & GRISWOLD
OR FILED BY __________________________________________________________________
THE SUM OF $75,035.00 FOR FILING AMD INC OF RPM, INC.
--------- -------
RETURNED TO: 32650 AMD $75,035.00
CALFEE, HALTER & GRISWOLD INC ----------
ATT: A.L. WACHS RECEIPT ----------
1800 SOCIETY BLDG. ----------
CLEVELAND, OH 44114-2688 ----------
----------
NAME: TOTAL FEE: $75,035.00
RPM, INC. ----------
<PAGE> 20
DEPARTMENT OF STATE
THE STATE OF OHIO
SHERROD BROWN
Secretary of State
202203
CERTIFICATE
IT IS HEREBY CERTIFIED that the Secretary of State of Ohio has custody of the
Records of Incorporation and Miscellaneous Filings; that said records show the
filing and recording of: AMD of RPM, Inc.
-------
UNITED STATES OF AMERICA Recorded on Roll G016 at Frame 1995 of the
STATE OF OHIO ---- ----
OFFICE OF THE SECRETARY OF STATE Records of Incorporation and Miscellaneous
Filings.
[SEAL] WITNESS MY HAND AND THE SEAL OF THE SECRETARY
OF STATE, AT THE CITY OF COLUMBUS, OHIO, THIS
9TH DAY OF OCT, A.D. 1986.
--- --- --
/s/ SHERROD BROWN
----------------------
SHERROD BROWN
Secretary of State
<PAGE> 21
CERTIFICATE OF AMENDMENT
TO
AMENDED ARTICLES OF INCORPORATION
OF
RPM, INC.
Charter No. 202203
Thomas C. Sullivan, Chairman, and Julius K. Nemeth, Secretary,
of RPM, Inc., an Ohio corporation, do hereby certify that a meeting of the
Shareholders of RPM, Inc. was duly called and held on October 9, 1986, at which
meeting a quorum of such Shareholders was present in person or by proxy at all
times, and that by the affirmative vote of the holders of shares entitling them
to exercise a majority of the voting power of said corporation, the following
resolutions were adopted for the purpose of amending Article FOURTH of the
Amended Articles of Incorporation of said corporation:
RESOLVED, That Article FOURTH of the Company's Amended Articles
of Incorporation be amended to read in its entirety as follows:
FOURTH: The maximum number of shares which the Corporation
is authorized to have outstanding is Fifty Million (50,000,000)
shares, all of which shall be Common Shares, without par value.
BE IT FURTHER RESOLVED, That the Chairman and the Secretary of
the Company be and they are hereby authorized and directed to file
promptly in the Office of the Secretary of State of Ohio an
appropriate Certificate of Amendment, and to take such other action as
may be appropriate, in order to render effective the foregoing
amendment and carry out the purposes of these resolutions.
IN WITNESS WHEREOF, said Thomas C. Sullivan, Chairman, and
Julius k. Nemeth, Secretary, of RPM, Inc., acting for and on behalf of said
corporation, have hereunto subscribed their names this 9th day of October, 1986.
/s/ Thomas C. Sullivan
----------------------------
Thomas C. Sullivan, Chairman
/s/ Julius K. Nemeth
----------------------------
Julius K. Nemeth, Secretary
(SEAL)
<PAGE> 22
CERTIFICATE OF AMENDMENT
TO
AMENDED ARTICLES OF INCORPORATION
OF
RPM, INC.
Charter No. 202203
Thomas C. Sullivan, Chairman, and Julius K. Nemeth, Secretary,
of RPM, Inc., an Ohio corporation, do hereby certify that a meeting of the
Shareholders of RPM, Inc. was duly called and held on October 9, 1986, at which
meeting a quorum of such Shareholders was present in person or by proxy at all
times, and that by the affirmative vote of the holders of shares entitling them
to exercise a majority of the voting power of said corporation, the following
resolutions were adopted for the purpose of amending Article FOURTH of the
Amended Articles of Incorporation of said corporation:
RESOLVED, That Article FOURTH of the Company's Amended Articles
of Incorporation be amended to read in its entirety as follows:
FOURTH: The maximum number of shares which the Corporation
is authorized to have outstanding is Fifty Million (50,000,000)
shares, all of which shall be Common Shares, without par value.
BE IT FURTHER RESOLVED, That the Chairman and the Secretary of
the Company be and they are hereby authorized and directed to file
promptly in the Office of the Secretary of State of Ohio an
appropriate Certificate of Arnendment, and to take such other action
as may be appropriate, in order to render effective the foregoing
amendment and carry out the purposes of these resolutions.
IN WITNESS WHEREOF, said Thomas C. Sullivan, Chairman, and
Julius K. Nemeth, Secretary, of RPM, Inc., acting for and on behalf of said
corporation, have hereunto subscribed their names this 9th day of October, 1986.
/s/ Thomas C. Sullivan
----------------------------
Thomas C. Sullivan, Chairman
/s/ Julius K. Nemeth
----------------------------
Julius K. Nemeth, Secretary
(SEAL)
<PAGE> 23
APPROVED
CERTIFICATE OF AMENDMENT
TO OCT 91992
AMENDED ARTICLES OF INCORPORATION
OF BOB TAFT
RPM, INC. SECRETARY OF STATE
Charter No. 202203
Thomas C. Sullivan, Chairman, and Paul A. Granzier, Secretary, of RPM,
Inc., an Ohio corporation, do hereby certify that a meeting of the Shareholders
of RPM, Inc. was duly called and held on October 9, 1992, at which meeting a
quorum of such Shareholders was present in person or by proxy at all times, and
that by the affirmative vote of the holders of shares entitling them to exercise
a majority of the voting power of said corporation, the following resolutions
were adopted for the purpose of amending Article FOURTH of the Amended Articles
of Incorporation of said corporation:
RESOLVED, That Article FOURTH of the Company's Amended Articles of
Incorporation be amended to read in its entirety as follows:
FOURTH: The maximum number of shares which the Corporation
is authorized to have outstanding is One Hundred Million
(100,000,000) shares, all of which shall be Common Shares,
without par value.
BE IT FURTHER RESOLVED, That the Chairman and the Secretary of the
Company be and they are hereby authorized and directed to file promptly in
the Office of the Secretary of State of Ohio an appropriate Certificate of
Amendment, and to take such other action as may be appropriate, in order to
render effective the foregoing amendment and carry out the purposes of
these resolutions .
IN WITNESS WHEREOF, said Thomas C. Sullivan, Chairman, and Paul A.
Granzier, Secretary, of RPM, Inc., acting for and on behalf of said corporation,
have hereunto subscribed their names this 9th day of October, 1992.
/s/ Thomas C. Sullivan
----------------------------
Thomas C. Sullivan, Chairman
/s/ Paul A. Granzier
----------------------------
Paul A. Granzier, Secretary
(SEAL)
<PAGE> 24
APPROVED
CERTIFICATE OF AMENDMENT
TO
AMENDED ARTICLES OF INCORPORATION
OF RPM, INC.
Charter No. 202203
Thomas C. Sullivan, Chairman of the Board and Chief Executive Officer,
and Paul A. Granzier, Secretary, of RPM, Inc., an Ohio corporation, do hereby
certify that a meeting of the shareholders of RPM, Inc. was duly called and held
on October 18, 1996, at which meeting a quorum of such shareholders was present
in person or by proxy at all times, and that by the affirmative vote of the
holders of shares entitling them to exercise at least a majority of the voting
power of said corporation, the following resolution was adopted for the purpose
of amending Article FOURTH of the Amended Articles of Incorporation of said
corporation:
RESOLVED, that Article FOURTH of the Amended Articles of Incorporation
of RPM, Inc. be hereby amended to read in its entirety as follows:
FOURTH: The maximum number of shares which the Corporation
is authorized to have outstanding is Two Hundred Million
(200,000,000) shares, all of which shall be Common Shares,
without par value.
IN WITNESS WHEREOF, said Thomas C. Sullivan, Chairman of the Board and
Chief Executive Officer, and Paul A. Granzier, Secretary, of RPM, Inc., acting
for and on behalf of said corporation, have hereunto subscribed their names this
18th day of November, 1996.
/s/ Thomas C. Sullivan
-----------------------------------------
Thomas C. Sullivan, Chairman of the Board
and Chief Executive Officer
/s/ Paul A. Granzier
-----------------------------------------
SEAL Paul A. Granzier, Secretary
RECEIVED
NOV 21, 1996
BOB TAFT
SECRETARY OF STATE
<PAGE> 1
Exhibit 4.4
================================================================================
ASSET PURCHASE AGREEMENT
SALE OF ASSETS
BY
MARSON CORPORATION AND MARSON CANADA INC.
TO
DYNATRON/BONDO CORPORATION
DATED: AS OF DECEMBER 30, 1996
================================================================================
- --------------------------------------------------------------------------------
ASSET PURCHASE AGREEMENT
<PAGE> 2
ASSET PURCHASE AGREEMENT
TABLE OF CONTENTS
ARTICLE 1. PURCHASE AND SALE OF ASSETS........................................ 1
1.1 PURCHASED ASSETS...................................................... 1
1.2 EXCLUDED ASSETS....................................................... 3
1.3 ASSUMPTION OF LIABILITIES............................................. 4
1.4 RETAINED LIABILITIES.................................................. 4
ARTICLE 2. AGGREGATE CONSIDERATION............................................ 5
2.1 AGGREGATE CONSIDERATION AND PAYMENT................................... 5
2.2 DETERMINATION OF CLOSING NET BOOK VALUE;
ADJUSTMENT OF THE AGGREGATE CONSIDERATION........................ 6
2.3 ALLOCATION OF AGGREGATE CONSIDERATION................................. 8
ARTICLE 3. THE CLOSING........................................................ 8
3.1 TIME AND PLACE OF CLOSING............................................. 8
3.2 DELIVERY OF DOCUMENTS OF TITLE........................................ 8
3.3 DELIVERY OF RECORDS AND CONTRACTS..................................... 8
3.4 GRANT OF LICENSE TO USE MARSON NAME................................... 9
3.5 DELIVERY OF DOCUMENTS BY THE BUYER.................................... 9
3.6 TRANSFER OF PURCHASED ASSETS.......................................... 9
3.7 FURTHER ASSURANCES.................................................... 9
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF THE SELLERS......................10
4.1 ORGANIZATION AND QUALIFICATION OF THE SELLERS.........................10
4.2 AUTHORIZATION OF TRANSACTION..........................................10
4.3 PRESENT COMPLIANCE WITH OBLIGATIONS AND LAWS..........................10
4.4 NO CONFLICT OF TRANSACTION WITH OBLIGATIONS AND LAWS..................10
4.5 FINANCIAL STATEMENTS..................................................10
4.6 ABSENCE OF UNDISCLOSED LIABILITIES....................................11
4.7 ABSENCE OF CERTAIN CHANGES............................................11
4.8 PAYMENT OF TAXES......................................................12
4.9 TITLE TO PROPERTIES; LIENS; SUFFICIENCY OF PURCHASED ASSETS...........12
4.10 COLLECTIBILITY OF ACCOUNTS RECEIVABLE.................................12
4.11 INVENTORIES...........................................................12
4.12 INTELLECTUAL PROPERTY RIGHTS..........................................13
4.13 MATERIAL CONTRACTS....................................................13
4.14 ENVIRONMENTAL MATTERS.................................................14
4.15 PERMITS...............................................................14
4.16 LITIGATION............................................................14
4.17 TRANSACTIONS WITH INTERESTED PERSONS..................................14
4.18 KNOWLEDGE.............................................................15
4.19 DISCLOSURE OF MATERIAL INFORMATION....................................15
4.20 PRODUCT WARRANTY......................................................15
4.21 PRODUCT LIABILITY.....................................................15
4.22 SUPPLIERS AND CUSTOMERS...............................................15
4.23 PREPAYMENTS AND DEPOSITS..............................................15
4.24 LOCATION..............................................................15
4.25 EMPLOYEES.............................................................16
4.26 INVESTMENT MATTERS....................................................16
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF BUYER AND RPM....................16
5.1 ORGANIZATION OF THE BUYER AND RPM.....................................16
5.2 AUTHORIZATION OF TRANSACTION..........................................16
5.3 NO CONFLICT OF TRANSACTION WITH OBLIGATIONS AND LAWS..................16
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ASSET PURCHASE AGREEMENT -i-
<PAGE> 3
5.4 LITIGATION............................................................17
5.5 REPORTS AND FINANCIAL STATEMENTS......................................17
5.6 KNOWLEDGE.............................................................17
ARTICLE 6. COVENANTS OF THE SELLERS...........................................17
6.1 CONDUCT OF AUTOMOTIVE BUSINESS........................................17
6.2 AUTHORIZATION FROM OTHERS.............................................18
6.3 BREACH OF REPRESENTATIONS AND WARRANTIES..............................18
6.4 DISTRIBUTION AGREEMENT................................................18
6.5 CONSUMMATION OF AGREEMENT.............................................18
ARTICLE 7. PRE-CLOSING COVENANTS OF BUYER AND RPM.............................18
7.1 CONFIDENTIALITY OF DUE DILIGENCE......................................18
7.2 AUTHORIZATION FROM OTHERS.............................................18
7.3 BREACH OF REPRESENTATIONS AND WARRANTIES..............................18
7.4 DISTRIBUTION AGREEMENT................................................19
7.5 CONSUMMATION OF AGREEMENT.............................................19
ARTICLE 8. CONDITIONS TO OBLIGATIONS OF THE BUYER AND RPM.....................19
8.1 REPRESENTATIONS; WARRANTIES; COVENANTS................................19
8.2 SUPPLY AGREEMENT......................................................19
8.3 NONCOMPETITION AGREEMENTS.............................................19
8.4 CONSENTS AND APPROVALS................................................19
8.5 NO MATERIAL ADVERSE CHANGE............................................19
8.6 APPROVAL OF DOCUMENTATION.............................................20
8.7 ABSENCE OF CERTAIN LITIGATION.........................................20
8.8 MARSON'S GOOD STANDING................................................20
8.9 MCI'S GOOD STANDING...................................................20
8.10 MCI'S TAX CLEARANCE...................................................20
8.11 OPINION...............................................................20
8.12 LIEN TERMINATIONS.....................................................20
8.13 TRANSFER INSTRUMENTS..................................................20
8.14 LICENSE AGREEMENT.....................................................20
8.15 TRANSITION SERVICE AGREEMENT..........................................21
8.16 DISTRIBUTION AGREEMENT................................................21
8.17 TERMINATION OF DISTRIBUTION AGREEMENT.................................21
8.17 OTHER.................................................................21
8.18 THE BUYER'S FRUSTRATION OF CLOSING CONDITIONS.........................21
ARTICLE 9. CONDITIONS TO OBLIGATIONS OF THE SELLERS...........................21
9.1 REPRESENTATIONS; WARRANTIES; COVENANTS................................21
9.2 SUPPLY AGREEMENT......................................................21
9.3 APPROVAL OF DOCUMENTATION.............................................21
9.4 ABSENCE OF CERTAIN LITIGATION.........................................21
9.5 BUYER'S GOOD STANDING.................................................22
9.6 RPM'S GOOD STANDING...................................................22
9.7 OPINION...............................................................22
9.8 EFFECTIVENESS OF REGISTRATION STATEMENT...............................22
9.9 NASDAQ LISTING APPROVAL...............................................22
9.10 DISTRIBUTION AGREEMENT................................................22
9.11 THE SELLERS' FRUSTRATION OF CLOSING CONDITIONS........................22
ARTICLE 10. TERMINATION OF AGREEMENT..........................................22
10.1 TERMINATION...........................................................22
10.2 EFFECT OF TERMINATION.................................................23
10.3 RIGHT TO PROCEED......................................................23
ARTICLE 11. RIGHTS AND OBLIGATIONS SUBSEQUENT TO THE CLOSING..................23
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ASSET PURCHASE AGREEMENT -ii-
<PAGE> 4
11.1 COLLECTION OF ASSETS..................................................23
11.2 SURVIVAL OF WARRANTIES................................................23
11.3 PRODUCT WARRANTY/LIABILITY............................................23
11.4 COBRA COMPLIANCE......................................................23
11.5 SECTION 22............................................................24
11.6 EXCISE TAX ACT........................................................24
11.7 FURTHER COOPERATION...................................................24
ARTICLE 12. INDEMNIFICATION...................................................24
12.1 DEFINITIONS...........................................................24
12.2 INDEMNIFICATION BY THE SELLERS........................................25
12.3 INDEMNIFICATION BY THE BUYER..........................................26
12.4 DEFENSE OF THIRD PARTY ACTIONS........................................27
12.5 MISCELLANEOUS.........................................................28
12.6 PAYMENT OF INDEMNIFICATION............................................28
ARTICLE 13. REGISTRATION......................................................28
13.1 REQUIRED REGISTRATION.................................................28
13.2 EXPENSES..............................................................28
13.3 INDEMNIFICATION.......................................................29
ARTICLE 14. GENERAL PROVISIONS................................................30
14.1 FEES AND EXPENSES.....................................................30
14.2 NOTICES...............................................................30
14.3 PUBLICITY AND DISCLOSURES.............................................32
14.4 ENTIRE AGREEMENT......................................................32
14.5 SEVERABILITY..........................................................32
14.6 BULK SALES LAW........................................................32
14.7 ASSIGNABILITY.........................................................32
14.8 AMENDMENT.............................................................32
14.9 COUNTERPARTS..........................................................32
14.10 EFFECT OF TABLE OF CONTENTS AND HEADINGS..............................32
14.11 WAIVERS...............................................................32
14.12 GOVERNING LAW.........................................................33
14.13 PRONOUNS..............................................................33
14.14 TIME PERIODS..........................................................33
14.15 NO STRICT CONSTRUCTION................................................33
- --------------------------------------------------------------------------------
ASSET PURCHASE AGREEMENT -iii-
<PAGE> 5
ASSET PURCHASE AGREEMENT
AGREEMENT entered into as of the 30th day of December, 1996, among
Dynatron/Bondo Corporation, a Georgia corporation with its principal place of
business at 3700 Atlanta Industrial Parkway, Atlanta, Georgia 30331 (the
"Buyer"), RPM, Inc., an Ohio corporation with its principal place of business at
2628 Pearl Road, Medina, Ohio 44258 ("RPM"), Marson Corporation, a Delaware
corporation with its principal place of business at 130 Crescent Avenue,
Chelsea, Massachusetts 02150 ("Marson") and Marson Canada Inc., a Canadian
corporation with its principal place of business at 7 Ingram Drive, Toronto,
Ontario, Canada M6M 2L8 ("MCI," together with Marson, the "Sellers").
RECITALS:
WHEREAS, subject to the terms and conditions set forth in this Agreement,
the Buyer wishes to acquire substantially all of the assets of Sellers used
exclusively in the business of Sellers involving the manufacture, supply and
distribution of automotive body filler, paint spray guns, shop tools, specialty
chemicals and auto body supply disposables such as masking supplies, which is
operated by Sellers as their Automotive Division (the "Automotive Business"),
but expressly excluding the Sellers' rivet, rivet tool and other industrial
fastener business and is prepared to assume certain liabilities and obligations
of the Sellers; and
WHEREAS, the Sellers wish to convey the Automotive Business and such assets
to the Buyer, subject to such liabilities.
WHEREAS, RPM owns 100% of the outstanding shares of capital stock of Buyer
and will benefit from the purchase of the assets from Sellers.
NOW, THEREFORE, in consideration of the mutual agreements contained herein
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, intending to be legally
bound, hereby agree as follows:
ARTICLE 1. PURCHASE AND SALE OF ASSETS.
1.1 PURCHASED ASSETS. Subject to the provisions of
this Agreement and except as expressly excluded in Section 1.2 hereof, the
Sellers agree to sell and the Buyer agrees to purchase, at the Closing (as
defined in Section 3.1 hereof), Sellers' right, title and interest in and to all
of the assets used exclusively in connection with the Automotive Business (the
"Purchased Assets"). The Purchased Assets include the following assets and
business of Sellers, in each case to the extent exclusively used in the
Automotive Business (provided that if Buyer and Walmec fail to execute and
deliver a distribution agreement as provided in Section 2.1, the Purchased
Assets shall exclude (A) all assets of Sellers exclusively relating to the paint
spray guns produced by Walmec which are represented on the Base Balance Sheet
and have a total value of $857,000 (the "Paint Spray Gun BBS Assets") and (B)
any and all other assets of Sellers exclusively relating to the paint spray guns
produced by Walmec):
(i) all of the inventory shown on the unaudited balance sheet of the
Sellers dated August 25, 1996 ( the "Base Balance Sheet"), which inventory
includes, in addition to the inventory of the Automotive Business, rivet and
rivet tool inventory having a value of approximately $333,000 based upon the
cost of physical inventory reflected on the price list set forth in the Supply
Agreement referenced in Section 8.2 hereof and representing (based on
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ASSET PURCHASE AGREEMENT
-1-
<PAGE> 6
current operational run rates) an approximate two (2) months supply of these
items, with only such additions and deletions with respect to such inventory
(both Automotive Business inventory and rivet and rivet tool inventory) as have
occurred since August 25, 1996;
(ii) all of the accounts receivable, machinery and equipment and
other assets shown on the Base Balance Sheet or otherwise, including any assets
owned by the Sellers which previously have been written off, with only such
changes with respect to such accounts receivable as have occurred since August
25, 1996 and such changes to such machinery, equipment and other assets as have
occurred in the ordinary course of the Automotive Business consistent with past
practice since August 25, 1996;
(iii) all rights and interests of the Sellers in and to executory
contracts, agreements and leases including without limitation the Supply
Agreement between Marson and Framar Distributor Corp. (the "Framar Agreement"),
other than in respect of any Retained Liability (as defined in Section 1.4
hereof), all of which are set forth on Schedule 1.1(iii) (the "Marson
Contracts");
(iv) all rights and interests of the Sellers in and to customer
purchase orders;
(v) all of the Sellers' books, records and accounts, correspondence
and any confidential information relevant to the current operation of the
Automotive Business which has been reduced to writing (which may be provided on
computer disks, tape or comparable media), including, but not limited to,
engineering records, purchase and sales records since January 1, 1994,
production flow chart records; credit records since January 1, 1994, personnel
records relating to the individuals listed on Schedule 1.1(v), accounting
records, and customer and vendor lists and records since January 1, 1994;
personnel records, payroll records and employee benefit summaries relating to
the individuals listed on Schedule 1.1(v).;
(vi) all of the Sellers' goodwill including all customer lists, sales
and marketing information, copyrights, trade secrets, designs, formulae,
processes, procedures, know-how and inventions and the Sellers' right, title and
interest in all foreign and domestic trademarks and tradenames and listed on
Schedule 1.1(vi) hereto (together with the items described in clause (vii) known
as the "Intellectual Property Rights"), excluding, however, the rights to the
"Marson" name, which shall be retained by the Sellers and licensed to the Buyer
pursuant to Section 3.4 hereof and the rights to the foreign and domestic
trademarks and tradenames relating to certain rivets and rivet tools currently
distributed through the Automotive Business, which trademarks and tradenames
shall be retained by the Sellers and licensed to the Buyer under the Supply
Agreement pursuant to Sections 8.2 and 9.2 hereof;
(vii) all of Sellers' rights, title and interest in and to the patent
applications and patents listed in Schedule 4.12, including any patents issuing
therefrom, and any reissues, reexaminations, divisions, continuations in whole
or in part, extensions and foreign counterparts thereof;
(viii) all of Sellers' right, title and interest in and to technical
documentation, including, but not limited to, all materials which reproduce,
patterns, plans, designs, research data, drawings, models, blueprints,
specifications, flow sheets, equipment and parts lists and descriptions and
related instructions, manuals, data, records and procedures;
(ix) all of Sellers' right, title and interest in, to and under
third-party manufacturers' warranties, other than in respect to any Retained
Liabilities; and
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ASSET PURCHASE AGREEMENT
-2-
<PAGE> 7
(x) any and all of the Sellers' permits, licenses, orders, ratings
and approvals of any and all U.S. and Canadian federal, state, provincial or
local governmental or regulatory authorities which primarily relate to the
Purchased Assets or their use in the Automotive Business to the extent that the
same are transferable.
1.2 EXCLUDED ASSETS. Sellers are not selling, transferring or assigning,
and Buyer is not purchasing any assets of Sellers which are not exclusively
related to the Automotive Business including, without limitation, those assets
used by the Sellers in their rivet, rivet tool and other industrial fastener
business hereinafter sometimes referred to the "Excluded Assets." The Excluded
Assets shall include, but shall not be limited to:
(i) the Sellers' cash and cash equivalents;
(ii) all raw materials, work in progress and finished goods inventory
not exclusively related to the Automotive Business including, without
limitation, all raw materials, work in progress and finished goods inventory
used by the Sellers' rivet, rivet tool and other industrial fastener business
(other than the rivet and rivet tool inventory shown on the Base Balance Sheet
and having a value of $333,000 based upon the cost of physical inventory
reflected on the price list set forth in the Supply Agreement referenced in
Section 8.2 hereof and representing an approximate two (2) month supply of such
items);
(iii) all accounts receivable and machinery and equipment not
exclusively related to the Automotive Business including, without limitation,
all accounts receivable and machinery and equipment used by, the Sellers' rivet,
rivet tool and other industrial fastener business and the accounts receivable
from those customers listed on Schedule 1.2 hereof;
(iv) all computer hardware and software owned or leased by the
Sellers, without regard as to whether it has been used by the Sellers in the
Automotive Business or their rivet, rivet tool and other industrial fastener
business;
(v) the Sellers' corporate records, journals, ledgers and books of
original entry and such other records which may be maintained by the Sellers
which are not exclusively related to the Automotive Business;
(vi) all of the Sellers' insurance policies and the Sellers' rights
under insurance policies, including, without limitation, all property and
casualty policies, general liability policies, product liability policies and
umbrella policies and also including all rights to insurance proceeds and
refunds payable thereunder;
(vii) any and all income, sales, use, corporation excise and franchise
tax refunds which the Sellers may be entitled to receive from any U.S. or
Canadian federal, state, provincial or local governmental authorities which
relate to their ownership of the Purchased Assets prior to the Closing or their
operation of the Automotive Business prior to the Closing;
(viii) pension, profit sharing and savings plans and trusts and any
assets thereof and all rights of Sellers with respect to any of their employees
or agents;
(ix) all rights to payment under that certain Settlement Agreement
between Sharpe Manufacturing Company and Marson;
(x) if Buyer and Walmec fail to execute and deliver a distribution
agreement as provided in Section 2.1, all Paint Spray Gun BBS Assets and any and
all other assets of Sellers exclusively relating to the paint spray guns
produced by Walmec; and
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ASSET PURCHASE AGREEMENT
-3-
<PAGE> 8
(xi) all rights of Sellers under this Agreement and the agreements
and instruments delivered to Sellers by Buyer pursuant to this Agreement or in
connection therewith.
1.3 ASSUMPTION OF LIABILITIES. Upon the sale and purchase of the Purchased
Assets, the Buyer shall assume, pay, perform or discharge when due those
liabilities and obligations of the Sellers set forth below to the extent
exclusively related to the Automotive Business or the Purchased Assets existing
as of the Closing or subsequent thereto (the "Assumed Liabilities"). The Assumed
Liabilities shall consist only of the following (provided that if Buyer and
Walmec fail to execute and deliver a distribution agreement as provided in
Section 2.1, the Assumed Liabilities shall exclude (A) all liabilities and
obligations of Sellers relating to the paint spray guns produced by Walmec which
are represented on the Base Balance Sheet and have a total value of $100,000
(the "Paint Spray Gun BBS Liabilities") and (B) any and all other liabilities
and obligations of Sellers exclusively relating to the paint spray guns produced
by Walmec):
(i) all liabilities and obligations of the Sellers reflected or
reserved against on the Base Balance Sheet, to the extent and only to the extent
that the same have not been paid or discharged prior to or at the date of the
Closing, and specifically excluding those obligations and liabilities referred
to in Section 1.4 hereof as Retained Liabilities;
(ii) all liabilities and obligations of the Sellers which have arisen
or which may arise in the ordinary course of the Automotive Business from August
25, 1996 to the date of the Closing to the extent and only to the extent that
the same have not been paid or discharged prior to or at the date of Closing,
and specifically excluding those obligations and liabilities referred to in
Section 1.4 hereof as Retained Liabilities;
(iii) all liabilities and obligations of the Sellers to customers for
goods shipped to customers after the Closing which are not reasonably
identifiable as goods having been placed in finished goods inventory prior to
the Closing, including, but not limited to, liabilities and obligations for
product warranty and product liability claims; and
(iv) all liabilities and obligations of the Sellers arising from and
after the date of the Closing under the Marson Contracts but only the extent (i)
accruing and relating solely to the period after the Closing and (ii) the
corresponding benefits therefrom are validly assigned to Buyer hereunder.
1.4 RETAINED LIABILITIES. Notwithstanding anything to the contrary set
forth above, the Buyer shall not assume, pay or discharge, and shall not be
liable for any debt, obligation, responsibility or liability of the Sellers,
whether fixed or contingent, whether known or unknown, (the "Retained
Liabilities") unless and only to the extent specifically described in Section
1.3 hereof as an Assumed Liability. Without limiting the generality of the
foregoing, the following are included among the Retained Liabilities which Buyer
does not assume or become responsible for:
(i) all liabilities and obligations related to or arising from any
transactions with any officer, director or stockholder of the Sellers or any
person or organization controlled by, controlling, or under common control with
any of them (an "Affiliate");
(ii) all liabilities and obligations for damage or injury to person
or property based upon events occurring prior to the date of Closing;
(iii) all liabilities and obligations arising out of the employment
relationship between Sellers and any of their employees or former employees
existing at any time related to the Automotive Business, whether before or after
the Closing, including, but not limited to,
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liabilities and obligations for wages, accident, disability, or workers'
compensation insurance or benefits, benefits under the Sellers' employee benefit
plans, including, without limitation, group health insurance, severance pay,
back pay, or liabilities which may be asserted against the Sellers or the Buyer
under Part B of Subtitle B of the Employment Retirement Income Security Act of
1974, as amended ("ERISA") or Section 4980B(f) of the Internal Revenue Code of
1986, as amended (the "Code") (herein collectively referred to as "COBRA");
(iv) all liabilities and obligations of Sellers to customers or third
parties in connection with the Automotive Business with respect to shortages and
defects in goods delivered to customers or in transit to customers prior to the
Closing or placed in finished goods inventory prior to the Closing and shipped
to customers after the Closing (provided such goods shipped after the Closing
are identifiable), including, but not limited to, liabilities and obligations
for product warranty and product liability claims;
(v) all liabilities and obligations arising out of or attributable
to Sellers' or their predecessors', release, generation, treatment, transport,
recycling, storage or disposal of any hazardous substance or arising out of or
attributable to Sellers' or their predecessors' arrangements for any of the
foregoing in connection with the Automotive Business prior to the Closing Date;
(vi) if Buyer and Walmec fail to execute and deliver a distribution
agreement as provided in Section 2.1, all Paint Spray Gun BBS Liabilities and
any and all other liabilities and obligations of Sellers relating to the paint
spray guns produced by Walmec; and
(vii) all liabilities and obligations with respect to the claims and
litigation described in Schedule 4.16 hereof.
ARTICLE 2. AGGREGATE CONSIDERATION.
2.1 AGGREGATE CONSIDERATION AND PAYMENT. Subject to the adjustment in
Section 2.2, the aggregate consideration to be paid by the Buyer to the Sellers
in consideration of the sale of the Automotive Business and the Purchased Assets
(the "Aggregate Consideration") shall be equal to:
(i) the aggregate amount of the Assumed Liabilities as of the
Closing; plus
(ii) if Buyer and Walmec SPA ("Walmec") agree to enter into a
distribution agreement substantially in the form of Exhibit A attached hereto
(the "Model Distribution Agreement"), that number of Common Shares, without par
value, of RPM (the "RPM Shares") using the RPM Market Value (as hereinafter
defined) which represents an aggregate value equal to Thirteen Million Six
Hundred Thousand Dollars ($13,600,000); PROVIDED, HOWEVER, that in the event the
RPM Market Value is less than $15.00 per share, subject to the RPM Share
Adjustments (as hereinafter defined), then either (a) Marson shall unilaterally
terminate this Agreement by delivering written notice of termination to Buyer
prior to the Closing, or (b) Marson shall receive 906,667 RPM Shares, subject to
the RPM Share Adjustments without giving regard to the RPM Market Value; or
(iii) if, notwithstanding the best efforts of the Sellers and the
Buyer, as provided in Sections 6.4 and 7.4 hereof, respectively, to cause the
Buyer and Walmec to enter a distribution agreement which is substantially in the
form of the Model Distribution Agreement, Buyer and Walmec agree to enter into a
distribution agreement which is not substantially in the form of the Model
Distribution Agreement, that number of RPM Shares using the RPM Market
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Value which represents an aggregate value equal to a sum negotiated in good
faith by the Sellers and Buyer (the "Negotiated Aggregate Value") which shall be
no greater than Thirteen Million Six Hundred Thousand Dollars ($13,600,000) and
no less than Twelve Million Eight Hundred Thousand Dollars ($12,800,000),
PROVIDED, HOWEVER, that (A) Marson, in its sole discretion, may accept or reject
any Negotiated Aggregate Value proposed by Buyer which is less than Thirteen
Million Six Hundred Thousand Dollars ($13,600,000) but shall be obligated to
accept (and shall be deemed to have accepted without further negotiation) a
Negotiated Aggregate Value proposed by the Buyer which equals Thirteen Million
Six Hundred Thousand Dollars ($13,600,000); and (B) the Buyer, in its sole
discretion, may accept or reject any Negotiated Aggregate Value which is greater
than Twelve Million Eight Hundred Thousand Dollars ($12,800,000) but shall be
obligated to accept (and shall be deemed to have accepted without further
negotiation) a Negotiated Aggregate Value proposed by Marson which equals Twelve
Million Eight Hundred Thousand Dollars ($12,800,000) and provided, further,
however, that in the event the RPM Market Value is less than $15.00 per share,
subject to the RPM Share Adjustments, then either (a) Marson shall unilaterally
terminate this Agreement by delivering written notice of termination to Buyer
prior to the Closing, or (b) Marson shall receive that number of RPM Shares
equal to the Negotiated Aggregate Value divided by 15 rounded to the nearest
whole RPM Share, subject to the RPM Share Adjustments without giving regard to
the RPM Market Value; or
(iv) if, notwithstanding the best efforts of the Sellers and the
Buyer, as provided in Sections 6.4 and 7.4 hereof, respectively, to cause the
Buyer and Walmec to enter a distribution agreement which is substantially in the
form of the Model Distribution Agreement, Buyer and Walmec are unable to agree
to a distribution agreement in any form, that number of RPM Shares, using the
RPM Market Value which represents an aggregate value equal to Twelve Million
Dollars ($12,000,000); PROVIDED, HOWEVER, that in the event the RPM Market Value
is less than $15.00 per share, subject to the RPM Share Adjustments, then either
(a) Marson shall unilaterally terminate this Agreement by delivering written
notice of termination to Buyer prior to the Closing, or (b) Marson shall receive
800,000 RPM Shares, subject to the RPM Share Adjustments without giving regard
to the RPM Market Value.
For purposes of this Agreement the term "RPM Market Value" shall mean the
average of the closing prices of RPM Shares for the five trading days ending on
and including the trading day two days prior to the Closing Date (as hereinafter
defined) as reported on the National Association of Securities Dealers, Inc.
Automated Quotation System ("Nasdaq"). For purposes of this Agreement the term
"RPM Share Adjustments" shall mean the number of RPM Shares listed in clause
(ii)(b), (iii)(b) or (iv)(b), as applicable, above, to be issued to Sellers as
adjusted to give full effect to any stock dividend (including any dividend of
securities convertible into RPM Shares), stock split, reverse stock split, or
any combination, reclassification, recapitalization or other like change in
respect of the RPM Shares occurring after this Agreement and prior to the
Closing, except for the issuance of RPM Shares (1) pursuant to the exercise of
employee stock options or (2) pursuant to any conversion of RPM's Liquid Yield
Option Notes due 2012.
2.2 DETERMINATION OF CLOSING NET BOOK VALUE; ADJUSTMENT OF THE AGGREGATE
CONSIDERATION.
(a) Not later than thirty (30) days after the Closing Date, Sellers shall
prepare and deliver to the Buyer (i) a balance sheet (the "Closing Balance
Sheet") which shall reflect the book value of both the Purchased Assets and the
Assumed Liabilities as of the Closing Date and (ii) a statement (the "Closing
Statement") indicating the difference between the aggregate net book value of
the Purchased Assets and the aggregate net book value of the Assumed Liabilities
(the "Closing Net Book Value"). The Closing Balance Sheet shall be prepared on a
basis consistent with the preparation of the Base Balance Sheet and otherwise in
accordance with
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generally accepted accounting principles. The Closing Balance Sheet delivered to
Buyer shall be accompanied by a certificate from KPMG Peat Marwick, the
accountants of the Sellers, that the Closing Balance Sheet has been prepared on
a basis consistent with the preparation of the Base Balance Sheet. Sellers shall
give Buyer notice of any physical inventory count to be taken in connection with
the preparation of the Closing Balance Sheet. Buyer and its accountants may
observe any physical inventory counts which are undertaken in connection
therewith. To the extent that the Closing Net Book Value differs from the
comparable net book value as derived from the Base Balance Sheet (the "Base Net
Book Value"), then the Aggregate Consideration shall be adjusted on a dollar for
dollar basis by the amount of such difference as hereinafter set forth. The Base
Net Book Value shall equal either (i) $4,343,000 if the Paint Spray Gun BBS
Assets are included in the Purchased Assets and the Paint Spray Gun BBS
Liabilities are included in the Assumed Liabilities or (ii) $3,586,000 if the
Paint Spray Gun BBS Assets are excluded from the Purchased Assets and the Paint
Spray Guns BBS Liabilities are excluded from the Assumed Liabilities.
(b) Following receipt of the Closing Balance Sheet, Buyer will be afforded
a period of twenty (20) calendar days (the "Review Period") to review the
Closing Balance Sheet. During such Review Period, Buyer and Buyer's accountant
will be afforded reasonable access to any of Sellers' employees involved in the
preparation of the Closing Balance Sheet and the records, work papers, trial
balances and similar materials prepared by Sellers or their accountants in
connection with the preparation or certification of the Closing Balance Sheet;
PROVIDED, HOWEVER, that Buyer shall provide reasonable prior notice of any such
investigation to Sellers so as not to unduly interfere with the operations of
Sellers. At or before the end of the Review Period, Buyer will either (i) accept
the Closing Balance Sheet and the Closing Statement in their entirety, in which
case the Closing Net Book Value will be deemed to be as set forth on the Closing
Statement, and the Closing Balance sheet and the Closing Statement shall become
final, binding and conclusive on Sellers and Buyer, or (ii) deliver to Seller
and Sellers' accountants a written notice in accordance with paragraph (e) of
this Section 2.2 disputing the Closing Balance Sheet.
(c) In the event that the Closing Net Book Value is less than the Base Net
Book Value, then within ten (10) days following the later of (x) the date the
Closing Balance Sheet and the Closing Statement is accepted by Buyer or (y) the
final, binding and conclusive determination of any dispute with respect to the
Closing Balance Sheet as provided in paragraph (e) of this Section 2.2, the
Sellers shall pay to the Buyer an amount equal to such difference, either, at
the election of the Sellers in their sole discretion, (i) in RPM Shares valued
at a price per RPM Share equal to the closing price as reported on Nasdaq of RPM
Shares on the date of delivery and effective receipt of the Closing Balance
Sheet to Buyer, or (ii) by bank cashier's check or by federal funds wire
transfer in immediately available funds.
(d) In the event that the Closing Net Book Value is equal to or greater
than the Base Net Book Value, then there shall be no postclosing adjustment to
the Aggregate Consideration pursuant to this Section 2.2.
(e) In the event that any dispute shall arise as to the manner of
preparation or the accuracy of the Closing Balance Sheet prior to the expiration
of the Review Period, the Buyer shall provide Sellers with written notice of
each disputed item. In the event of such a dispute, Buyer and Sellers shall
attempt to reconcile in good faith their differences as to such items within
twenty (20) calendar days (the "Resolution Period") of Sellers' receipt of such
notice, and any resolution by them as to any disputed items shall be final,
binding and conclusive on Sellers and Buyer. If Buyer and Sellers are unable to
reach a resolution with such effect within the Resolution Period, Buyer and
Sellers shall submit the dispute to the national office of Ernst & Young (the
"Independent CPA"). The determination of such dispute by the Independent CPA
shall be final, binding and conclusive on the parties. The fees and expenses of
the Independent
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CPA shall be assessed by the Independent CPA fifty percent (50%) against the
Sellers and fifty percent (50%) against the Buyer and shall be paid by each of
them in those proportions.
2.3 ALLOCATION OF AGGREGATE CONSIDERATION. The Aggregate Consideration
shall be allocated among the Purchased Assets in the manner set forth in
Schedule 2.3 annexed hereto, subject to any adjustment to the Aggregate
Consideration which shall be made pursuant to Section 2.2 hereof. The parties
hereto acknowledge and agree that such allocation reflects the respective fair
market values of the Purchased Assets and that they will not take a position
inconsistent with such allocation for U.S. or Canadian federal, state,
provincial or local tax purposes.
ARTICLE 3. THE CLOSING.
3.1 TIME AND PLACE OF CLOSING. The closing of the purchase and sale
provided for in this Agreement (herein called the "Closing") shall be held at
the offices of Brown, Rudnick, Freed & Gesmer at One Financial Center, Boston,
Massachusetts, at 10:00 a.m. on or before January 17, 1997 or at such other
place, date or time as may be fixed by mutual agreement of the parties (the
"Closing Date").
3.2 DELIVERY OF DOCUMENTS OF TITLE. At the Closing the Sellers shall
deliver or cause to be delivered to the Buyer, against the Buyer's assumption of
the Assumed Liabilities and delivery of the Share Certificates (as hereinafter
defined), good and sufficient instruments of transfer transferring to the Buyer
title to all the Purchased Assets, including a Bill of Sale in the form attached
hereto as Exhibit B-1, a Patent Assignment in the form of Exhibit B-2, a
Trademark Assignment in the form of Exhibit B-3, assignments of leases, and such
other instruments of title or transfer as may be required. Such instruments of
transfer (i) shall be in the form and will contain the warranties, covenants and
other provisions (not inconsistent with the provisions hereof) which are usual
and customary for transferring the type of property involved under the laws of
the jurisdictions applicable to such transfers, (ii) shall be in form and
substance satisfactory to counsel for the Buyer, and (iii) shall effectively
vest in the Buyer good and marketable title to all the Purchased Assets, free
and clear of all security interests, mortgages, pledges, liens, and encumbrances
of any kind whatsoever.
3.3 DELIVERY OF RECORDS AND CONTRACTS. At the Closing the Sellers also
shall deliver or cause to be delivered to the Buyer, against the Buyer's
assumption of the Assumed Liabilities and delivery of the Share Certificates,
all of the, Marson Contracts, commitments and rights of the Sellers exclusively
relating to the Automotive Business, with such assignments thereof and consents
to assignments as are necessary to assure the Buyer of the full benefit of the
same. The Sellers shall also deliver to the Buyer at the Closing all of the
Sellers' business records, books and other data exclusively relating to the
Purchased Assets and the Automotive Business and described in Section 1.1
hereof, (except corporate records and other property of the Sellers excluded
under Section 1.2 hereof), and the Sellers shall take all requisite steps to put
the Buyer in actual possession and operating control of the Purchased Assets and
the Automotive Business. After the Closing the Buyer shall afford to the Sellers
and their accountants and attorneys reasonable access during Buyer's business
hours to the books and records of the Sellers delivered to the Buyer under this
Section 3.3 and shall permit the Sellers to make copies therefrom (at Sellers'
expense) for the purpose of preparing such tax returns of the Sellers as may be
required after the Closing and for other proper purposes approved in writing by
the Buyer. After the Closing the Sellers shall afford to the Buyer and its
accountants and attorneys reasonable access during Sellers' business hours to
the books and records of the Sellers for purposes reasonably related to the
operation of the Automotive Business by the Buyer.
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3.4 GRANT OF LICENSE TO USE MARSON NAME. At the Closing the Sellers shall
also grant to the Buyer a license to use the name "Marson" in connection with
the Buyer's operation of the Automotive Business, such license to be on the
terms and conditions set forth in the License Agreement attached hereto as
Exhibit C (the "License Agreement"). The Sellers shall execute and deliver the
License Agreement at the Closing.
3.5 DELIVERY OF DOCUMENTS BY THE BUYER. At the Closing, the Buyer shall
deliver or cause to be delivered to the Sellers, against delivery of the
documents described in Sections 3.2, 3.3 and 3.4 hereof, the License Agreement,
an Instrument of Assumption in the form attached hereto as Exhibit D and
certificates representing the RPM Shares (the "Share Certificates").
3.6 TRANSFER OF PURCHASED ASSETS.
(a) At the Closing, Buyer shall, at its expense, crate, remove and
transport the Purchased Assets from Marson's facilities in Chelsea,
Massachusetts, Sparks, Nevada and Toronto, Ontario, Canada, without damage to
Marson's property or significant disruption of Marson's other businesses,
provided that Marson shall cooperate with Buyer in effecting such process.
(b) Subject to the Transition Service Agreement referenced in Section 8.15
hereof, Buyer and Sellers agree that, commencing on the Closing Date and for
such period of time after the date thereof as Buyer may elect but in no event
later than sixty (60) days after the Closing Date (the "Interim Period"), the
machinery, equipment and other personal property included among the Purchased
Assets and located at Marson's owned or leased premises in Chelsea,
Massachusetts, Sparks, Nevada and Toronto, Ontario, Canada, may remain at
Marson's owned or leased premises, as applicable. During the Interim Period and
subject to Section 3.6(a) hereof, Buyer shall have the right to remove such
machinery, equipment and other personal property from Marson's owned or leased
premises, as applicable after provision of reasonable notice. Subject to the
Transition Service Agreement, Sellers assume no liability for loss or damage to
any such machinery, equipment or other personal property after the Closing Date
and all risk of loss or damage to the same shall be borne by the Buyer from and
after the Closing Date.
3.7 FURTHER ASSURANCES.
(a) From time to time after the Closing at the request of the Buyer and
without further consideration, the Sellers shall execute and deliver further
instruments of transfer and assignment (in addition to those delivered under
Sections 3.2, 3.3 and 3.4 hereof) and shall take such other action as the Buyer
may reasonably require to effectively transfer and assign to, and vest in, the
Buyer each of the Purchased Assets. To the extent that the assignment of any
lease, contract, commitment or right pertaining to the Automotive Business shall
require the consent of other parties thereto, this Agreement shall not
constitute an assignment thereof; however, the Sellers shall use their best
efforts before and after the Closing to obtain any necessary consents or waivers
to assure the Buyer of the benefits of such leases, contracts, commitments or
rights. If such consent is not obtained, Sellers agree to cooperate with Buyer
in any reasonable arrangement designed to provide for Buyer the benefits
thereunder, including, but not limited to, having (a) Buyer act as agent for
Sellers and (b) Sellers enforce for the benefit of Buyer any and all rights of
Sellers against the other party thereto arising out of the cancellation by such
other party or otherwise. Nothing herein shall be deemed a waiver by the Buyer
of its right to receive at the Closing an effective assignment of each of the
leases, contracts, commitments or rights of the Sellers exclusively relating to
the Automotive Business.
(b) From time to time after the Closing at the request of the Sellers and
without further consideration, the Buyer shall execute and deliver such further
documents (in addition to the Instrument of Assumption delivered under Section
3.5 hereof) and shall take such other action as
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the Sellers may reasonably require in order to confirm the Buyer's assumption of
the Assumed Liabilities.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF THE SELLERS.
The Sellers hereby represent and warrant to the Buyer as follows:
4.1 ORGANIZATION AND QUALIFICATION OF THE SELLERS. Each of the Sellers is
a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, with full power and authority to
own or lease the Purchased Assets, to conduct the Automotive Business in the
manner and in the places where such properties are owned or leased or such
Automotive Business is conducted by it and to consummate the transactions
contemplated by this Agreement. The copies of the Sellers' Certificates of
Incorporation or equivalent documents as amended to date ("Charter"), and of the
Sellers' bylaws or equivalent documents as amended to date ("Bylaws"), and
previously delivered to Buyer's counsel, are complete, correct and in effect as
of the date hereof. Each of the Sellers is duly qualified to do business as a
foreign corporation in all jurisdictions where the failure to be so qualified
would have a material adverse effect upon the Automotive Business. Marson owns
of record and beneficially all of the capital stock and rights convertible into
capital stock of MCI. Marson has full corporate power and authority to own the
capital stock of MCI.
4.2 AUTHORIZATION OF TRANSACTION. All necessary action, corporate or
otherwise, has been taken by each of the Sellers to authorize the execution,
delivery and performance of this Agreement and the transactions contemplated
hereby, and this Agreement and each other agreement and document executed and
delivered by Sellers in connection herewith are the valid and binding
obligations of the Sellers, enforceable in accordance with their terms, subject
to laws of general application affecting creditors' rights generally.
4.3 PRESENT COMPLIANCE WITH OBLIGATIONS AND LAWS. Neither of the Sellers
is in violation of its respective Charter or Bylaws. Neither the ownership nor
use of the Purchased Assets nor the conduct of the Automotive Business
constitutes (i) a material default of or material breach of any Marson Contract
to which either of the Sellers is a party or by which either of the Sellers is
bound; or (ii) to the knowledge of the Sellers, a violation of any law,
regulation, administrative order, arbitration award or judicial order or other
similar restriction applicable to the Sellers, the Automotive Business or the
Purchased Assets.
4.4 NO CONFLICT OF TRANSACTION WITH OBLIGATIONS AND LAWS.
Neither the execution, delivery and performance of this Agreement, nor the
consummation of the transactions contemplated hereby, will: (i) constitute a
breach or violation of the Charter or Bylaws of either of the Sellers; (ii)
conflict with or constitute (with or without the passage of time or giving of
notice) a default under, or a breach of, any Marson Contract, instrument or
obligation exclusively pertaining to the Automotive Business or the Purchased
Assets to which either of the Sellers is a party or by which the Sellers or any
of the Purchased Assets are bound; or (iii) to the knowledge of the Sellers,
result in a violation of any law, regulation, administrative order or judicial
order applicable to the Sellers, the Automotive Business or the Purchased
Assets. The execution, delivery and performance of this Agreement and the
transactions contemplated hereby by Sellers do not require the consent, waiver,
approval, authorization, exemption of, or giving of notice to, any governmental
authority.
4.5 FINANCIAL STATEMENTS. Attached as Schedule 4.5 hereto are the
unaudited income statements for the Automotive Business for the year ended
December 31, 1995 and for the eight month period ended August 25, 1996 as well
as an unaudited balance sheet for the Automotive
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Business dated as of August 25, 1996 (the "Base Balance Sheet"). Such income
statements were prepared from Sellers' books of account, which books of account
were prepared in accordance with generally accepted accounting principles
consistently applied, except for the absence of footnote disclosure and
customary year end adjustments of a normal recurring type which would not be
material either individually or in the aggregate. Such income statements are
complete and correct and fairly present the results of operations for the
Automotive Business for the periods covered thereby. The books of account of
Sellers accurately reflect all items of income and expense (including accruals)
and all assets and liabilities of the Automotive Business in accordance with
normal accrual accounting practices, subject to customary year-end adjustments
which would not be material either individually or in the aggregate. The Base
Balance Sheet is complete and correct and fairly presents the financial position
of the Automotive Business as of the date thereof.
4.6 ABSENCE OF UNDISCLOSED LIABILITIES. There are no liabilities of any
nature with respect to the Automotive Business or the Purchased Assets, whether
accrued, absolute, contingent or otherwise (including without limitation
liabilities as guarantor or otherwise with respect to obligations of others, or
liabilities for taxes due or then accrued or to become due), except: (i)
liabilities stated or adequately reserved against on the Base Balance Sheet;
(ii) liabilities arising in the ordinary course of business since the date of
the Base Balance Sheet; and (iii) liabilities disclosed in Schedule 4.6 hereto.
Neither of the Sellers, nor to the Sellers' knowledge, any other party to any
contract, agreement or license identified on Schedule 4.13, has breached any
obligation under any contract, agreement or license identified on Schedule 4.13.
No representation is made as to general economic conditions or the general
fluctuations of the relevant industries.
4.7 ABSENCE OF CERTAIN CHANGES. Except as disclosed in Schedule 4.7
hereto, since the date of the Base Balance Sheet, there has not been:
(i) any mortgage, encumbrance or lien placed on any of the Purchased
Assets which remains in existence on the date hereof or at the time of Closing;
(ii) any obligation or liability incurred by the Sellers with respect
to the Automotive Business other than obligations and liabilities incurred in
the ordinary course of business, consistent with past practice;
(iii) any purchase, sale or other disposition, or any agreement or
other arrangement for the purchase, sale or other disposition, of any machinery,
equipment or other assets included among the Purchased Assets other than
inventory or accounts receivable;
(iv) any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the Automotive Business or the
Purchased Assets;
(v) any change in Sellers' accounting procedures or practices as it
relates to the Automotive Business;
(vi) any waiver, release, cancellation or compromise of any debts
owed to them or claims or rights against others exceeding $10,000 in the
aggregate; or
(vii) other than in the ordinary course of business, any adverse
change, or event or circumstances which would reasonably be expected to result
in any material adverse change in the assets used in, or in the business
relationships or the operation of, the Automotive Business.
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4.8 PAYMENT OF TAXES. The Sellers have filed, either separately or on a
consolidated basis with their Affiliates, all U.S. and Canadian federal, state,
provincial, local, and foreign government income excise or franchise tax
returns, real estate and personal property tax returns, sales and use tax
returns and all other tax returns required to be filed by them, and such returns
were, when filed, correct and complete and the Sellers have paid all taxes owing
by them except taxes which have not yet accrued or otherwise become due for
which adequate provision has been made. Except as disclosed in Schedule 4.8
hereto, there are no tax claims, audits or proceedings pending in connection
with the Purchased Assets and, to the knowledge of Sellers, there are no such
threatened claims, audits or proceedings.
4.9 TITLE TO PROPERTIES; LIENS; SUFFICIENCY OF PURCHASED ASSETS.
(a) The Purchased Assets do not include any real property. Set forth on
Schedule 4.9 hereto is a listing of (i) all real property owned by the Sellers
and used in the operation of the Automotive Business; (ii) all leases under
which the Sellers lease real property which is used by the Sellers in the
operation of the Automotive Business; (iii) a description of all of the
machinery, equipment and other personal property owned and used by the Sellers
in the operation of the Automotive Business; and (iv) all leases under which the
Sellers lease any machinery, equipment or other personal property which is used
in the operation of the Automotive Business. Except for the Excluded Assets, the
Purchased Assets include all of the material tangible assets owned or leased by
the Sellers used exclusively for the Automotive Business in the ordinary course
as presently conducted.
(b) Except as specifically disclosed in Schedule 4.9 hereto or in the Base
Balance Sheet, the Sellers have good and merchantable title to all of the
Purchased Assets, including the machinery, equipment and other personal property
described in said schedule, and all of the leases which are included among the
Purchased Assets are valid and subsisting and fully assignable by the Sellers.
(c) Except as specifically disclosed in Schedule 4.9 hereof, none of the
Purchased Assets is subject to any security interest, mortgage, pledge, lien
(other than for taxes not yet due and payable), conditional sale agreement or
encumbrance.
(d) The Purchased Assets are and will be on the date on which a particular
Purchased Asset is ready for transfer from Sellers to Buyer pursuant hereto in
good working order, normal wear and tear excepted, and are fit in all material
respects for their current use and purpose; provided however, that no warranty
is made related to stored equipment not in current use, which equipment is being
conveyed "as is."
4.10 COLLECTIBILITY OF ACCOUNTS RECEIVABLE. All of the accounts receivable
of the Automotive Business shown or reflected on the Base Balance Sheet, less a
reserve for bad debts in the amount shown on the Base Balance Sheet, are, and
those existing at the time of Closing, less the reserve shown on the Base
Balance Sheet, will be, (i) valid and enforceable claims, (ii) which arose out
of transactions with independent third parties, (iii) fully collectible by Buyer
in the ordinary course of business and within 120 days after the Closing Date,
and (iv) subject to no set-off or counterclaim. Schedule 4.10 includes a
complete aging schedule of accounts receivable related to the Automotive
Business as of November 30, 1996.
4.11 INVENTORIES. Except as shown on Schedule 4.11, all items contained in
the inventories of the Automotive Business reflected on the Base Balance Sheet,
net of the reserves stated in the Base Balance Sheet are, and those existing at
the Closing, net of the reserves stated in the Closing Balance Sheet, will be of
a quality and quantity salable in the ordinary course of the Automotive
Business. The values of the inventories stated in the Base Balance Sheet have
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been determined in accordance with generally accepted accounting principles,
practices and methods and, other than the rivet and rivet tool inventory,
reflect the Sellers' customary actual unit standard costs. The values of the
rivet and rivet tool inventory stated in the Base Balance Sheet have been
determined at the cost of physical inventory reflected on the price list set
forth in the Supply Agreement referenced in Section 8.2 hereof and represent
(based on current operational run rates) an approximate two (2) months supply of
these items.
4.12 INTELLECTUAL PROPERTY RIGHTS. Schedule 4.12 lists all Intellectual
Property Rights owned by Sellers or in which (as noted on such Schedule) Sellers
have any rights or licenses exclusively in connection with the Automotive
Business. To the knowledge of Sellers, there has not been any infringement or
alleged infringement by others of any such Intellectual Property Rights. Except
as set forth in Schedule 4.12, Sellers are not a party to any contract,
agreement or license, whether as licensor, licensee, franchisor, franchisee,
dealer, distributor, or otherwise, with respect to any Intellectual Property
Rights or trade secret. To the knowledge of the Sellers, Sellers have the right
to use all Intellectual Property Rights as are necessary to enable Sellers to
conduct, and Buyer to continue to conduct after the Closing, all phases of the
Automotive Business in the manner presently conducted by Sellers, and, to the
knowledge of Sellers, that use has not conflicted with, infringed, or otherwise
violated any rights of any entity. No Affiliate or employee of Sellers owns or
uses any of the Intellectual Property Rights used in the Automotive Business,
and, to the knowledge of the Sellers, Sellers have the unrestricted right to
sell or assign to Buyer all such owned Intellectual Property Rights and all such
licenses or other rights. The Intellectual Property Rights listed in Schedule
4.12 are valid and in full force and effect as of the Closing Date and are not
subject to any taxes, maintenance fees, or actions falling due within the next
three months following the date hereof. Except as set forth in Schedule 4.12,
there have been no interference actions or other judicial, arbitration, or other
adversary proceedings concerning the Intellectual Property Rights listed in
Schedule 4.12. Each application for an Intellectual Property Right listed in
Schedule 4.12 is awaiting action by its respective appropriate recording office
except as otherwise indicated in Schedule 4.12. To the knowledge of Sellers, the
manufacture, use, performance or sale of products or services incorporating or
exclusively in connection with the Intellectual Property Rights listed in
Schedule 4.12 do not violate or infringe on any Intellectual Property Right or
other right of any entity, and, to the knowledge of Sellers, Sellers have not
otherwise infringed any Intellectual Property Right, trade secret or other right
of any entity in operating the Automotive Business. Sellers have the exclusive
right to use and the unrestricted right to transfer to Buyer all of Sellers'
trade secrets used in connection with the Automotive Business, and none of such
trade secrets have been used, divulged, or appropriated for the benefit of any
past or present employees of Sellers, or to the detriment of Sellers.
4.13 MATERIAL CONTRACTS.
Except for contracts, agreements and licenses described in Schedule
4.13 hereto, the Sellers are not parties to or subject to:
(i) any contract or agreement pertaining to the Automotive Business
for the purchase of any commodity, material, equipment or asset, except purchase
orders in the ordinary course;
(ii) any other contracts or agreements creating any obligations of
the Sellers with respect to the Automotive Business after the date of the Base
Balance Sheet of $10,000 or more, other than sales and purchase commitments in
the ordinary course of business;
(iii) any contract or agreement creating obligations with respect to
the Automotive Business in excess of $10,000 which by its terms is not
terminable without penalty by the Sellers upon thirty (30) days' notice;
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(iv) any contract or agreement for the sale or lease of inventories
or equipment of the Automotive Business not made in the ordinary course;
(v) any contract or agreement containing covenants limiting the
freedom of the Sellers to compete in any line of business or with any person or
entity;
(vi) any franchise contract, agreement or license pertaining to the
Automotive Business, whether as franchisor or franchisee or licensor or
licensee; or
(vii) any other contract or agreement material to the Automotive
Business.
Sellers have delivered, or will deliver on or before the Closing Date, to
Buyer accurate and complete copies of each written contract, agreement or
license set forth on Schedule 4.13, in each case with all modifications and
amendments thereto.
4.14 ENVIRONMENTAL MATTERS. Except as disclosed in Schedule 4.14 hereto, to
the Sellers' knowledge, any and all waste oil, hazardous waste, hazardous
substances, toxic substances or hazardous materials which have been used or
generated by the Sellers at MCI's location under the Lease Agreement or which
have been used or generated elsewhere in connection with the operation of the
Automotive Business have always been and are being generated, used, stored,
treated, shipped and disposed of in material compliance with all applicable U.S.
and Canadian federal, state, provincial and local laws, regulations and
ordinances. For purposes of this section, "oil", "hazardous waste", "hazardous
substances", "toxic substances" and "hazardous material" shall have the meaning
currently set forth in the U.S. Resource Conservation and Recovery Act, the U.S.
Comprehensive Environmental Response, Compensation and Liability Act, the U.S.
Hazardous Materials Transportation Act, the U.S. Federal Water Pollution Control
Act, the U.S. Toxic Substances Control Act, or as currently defined in any U.S.
federal regulations adopted pursuant to such Acts.
4.15 PERMITS. To the Sellers' knowledge, the Sellers hold all licenses,
permits and franchises which are required to permit them to operate the
Automotive Business as presently conducted, and all such licenses, permits and
franchises are listed on Schedule 4.15 hereto.
4.16 LITIGATION. Except for matters described in Schedule 4.16 hereto,
there is no suit, claim, action, proceeding or governmental investigation
pending or, to the Sellers' knowledge, threatened, against the Sellers, before
any court or any governmental agencies or regulatory or authorities which could
reasonably be expected to have a material adverse effect on the Automotive
Business or the Purchased Assets or which seeks to enjoin or otherwise hinder or
prevent the consummation of the transactions contemplated by this Agreement and
the Sellers are not subject to any order, injunction or decree relating to or
affecting the Automotive Business or the Purchased Assets and, to the knowledge
of Sellers, there is no statement of facts or events which would reasonably be
expected to form the basis for such a claim, suit, action, investigation or
proceeding the resolution of which, if unfavorable to Sellers, would reasonably
be expected to have a material adverse effect on the Automotive Business or the
Purchased Assets.
4.17 TRANSACTIONS WITH INTERESTED PERSONS. Except as shown on Schedule
4.17, no officer, supervisory employee, director or stockholder of the Sellers
or any Affiliate, or their respective spouses or children, (i) owns, directly or
indirectly, on an individual or joint basis, any material interest in, or serves
as an officer or director of, any customer, competitor or supplier of the
Automotive Business, or any organization which has a material contract or
arrangement with the Sellers pertaining to the Automotive Business, or (ii) has
any contract or agreement with the Sellers pertaining to the Automotive
Business.
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4.18 KNOWLEDGE. To the extent that any portion of the representations and
warranties made herein were made to the knowledge of the Sellers, such knowledge
shall be understood to mean the actual knowledge of any of the persons listed on
Schedule 4.18 hereto holding positions with the Sellers described therein and
shall be qualified by and limited to such actual knowledge.
4.19 DISCLOSURE OF MATERIAL INFORMATION. Neither this Agreement nor any
exhibit hereto or certificate issued pursuant hereto contains any untrue
statement of a material fact, or omits to state a material fact necessary to
make the statements herein not misleading, relating to the business or affairs
of the Automotive Business.
4.20 PRODUCT WARRANTY. Except as set forth on Schedule 4.20, since January
1, 1995: (i) there have been no product or service warranty claims made by
customers of Sellers relating to the Automotive Business for an amount in excess
of $5,000 with respect to any single claim or for amounts in excess of $50,000
with respect to all claims made in any fiscal year; (ii) there have been no
product recalls by Sellers relating to the Automotive Business of products
having a customary standard unit cost in excess of $5,000 with respect to any
single recall or of products having a customary standard unit cost in excess of
$50,000 in the aggregate with respect to all product recalls in any fiscal year;
and (iii) there are no product and service warranties outstanding or currently
being offered to customers of Sellers relating to the Automotive Business.
4.21 PRODUCT LIABILITY. Except as listed on Schedule 4.21, no product
liability or other tort claims have been made or, to the knowledge of Sellers,
threatened against Sellers relating to products sold or services performed by
the Automotive Business in the past three (3) years. To the knowledge of
Sellers, there are no defects in the design or manufacture of products
manufactured or sold by the Automotive Business on or before the date hereof.
Sellers have delivered, or will deliver on or before the Closing Date, to Buyer
copies of all the product liability insurance policies relating to the
Automotive Business purchased in the last three (3) years.
4.22 SUPPLIERS AND CUSTOMERS. Schedule 4.22 lists all suppliers and
customers which accounted for more than 5% of the Automotive Business' sales or
purchases since January 1, 1995. Except as set forth on Schedule 4.22, since
January 1, 1995, no supplier or customer which accounted for more than 5% of the
Automotive Business' sales or purchases and no other supplier or customer of
material importance to the Automotive Business (including, but not limited to,
any supplier who is the Automotive Business' sole source of supply of any
product or service) has terminated, or, to the knowledge of Sellers, threatened
to terminate, its relationship with Sellers in connection with the Automotive
Business or has during the past year decreased or delayed materially, or, to the
knowledge of Sellers, threatened to decrease or delay materially, its services
or supplies to Sellers in connection with the Automotive Business or its usage
of Sellers' services or products relating to the Automotive Business, as the
case may be.
4.23 PREPAYMENTS AND DEPOSITS. Except as set forth on the Base Balance
Sheet or those which have arisen in the ordinary course since the date of the
Base Balance Sheet, Sellers, in connection with the Automotive Business, have
not received any prepayments or deposits from customers for products to be
shipped, or services to be performed, subsequent to the Closing Date.
4.24 LOCATION. The complete addresses of all locations of any of the
Purchased Assets are set forth on Schedule 4.24.
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4.25 EMPLOYEES. The salaries and employee benefits of the employees listed
on Schedule 1.1(v) are accurately summarized in all material respects on
Schedule 4.25 hereto. The Sellers have accrued or paid in full to those
employees listed on Schedule 1.1(v) all wages, commissions, bonuses, vacation
pay and other direct compensation for all services performed by them. To the
knowledge of the Sellers, there are no grievances or claims by any of the
employees listed on Schedule 1.1(v) pending with respect to their employment by
the Sellers, including, but not limited to, sexual harassment and discrimination
claims and claims arising under workers' compensation laws.
4.26 INVESTMENT MATTERS.
(a) Marson is an "accredited investor" within the meaning of Rule 501(a)(3)
under the Securities Act of 1933 (the "Securities Act").
(b) Marson will not sell, transfer or otherwise dispose of the RPM Shares
unless (i) a registration statement filed with the Securities and Exchange
Commission pursuant to the Securities Act with respect thereto is in effect or
(ii) an exemption from such registration is available.
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF BUYER AND RPM.
Each of the Buyer and RPM hereby represents and warrants to the Sellers as
follows:
5.1 ORGANIZATION OF THE BUYER AND RPM. Each of the Buyer and RPM is a
corporation duly organized, validly existing and in good standing under the laws
of the state of its incorporation with full corporate power and authority to own
or lease its properties and to conduct its business in the manner and in the
places where such properties are owned or leased or such business is conducted
by it and to consummate the transactions contemplated by this Agreement.
5.2 AUTHORIZATION OF TRANSACTION. All necessary action, corporate or
otherwise, has been taken by the Buyer and RPM to authorize the execution,
delivery and performance of this Agreement and the transactions contemplated
hereby, and this Agreement and each other agreement and document executed and
delivered by Buyer and RPM in connection herewith are the valid and binding
obligations of the Buyer and RPM, as applicable, enforceable in accordance with
their respective terms, subject to laws of general application affecting
creditors' rights generally. The issuance of the RPM Shares pursuant to the
terms of this Agreement has been duly and validly authorized, and no further
approval or authority of the stockholders or the directors of RPM is required
for the issuance and sale of the RPM Shares. When issued and sold to Sellers,
the RPM Shares will be validly issued, fully paid and nonassessable.
5.3 NO CONFLICT OF TRANSACTION WITH OBLIGATIONS AND LAWS. Neither the
execution, delivery and performance of this Agreement, nor the consummation of
the transactions contemplated hereby, will: (i) constitute a breach or violation
of the Buyer's or RPM's Articles of Incorporation or bylaws; (ii) conflict with
or constitute (with or without the passage of time or the giving of notice) a
default under, or a breach of, any material agreement, instrument or obligation
to which the Buyer or RPM is a party or by which either of them or their
respective assets are bound; or (iii) result in a violation of any law,
regulation, administrative order or judicial order applicable to the Buyer or
RPM. The execution, delivery and performance of this Agreement and the
transactions contemplated hereby by the Buyer and RPM do not require the
consent, waiver, approval, authorization, exemption of, or giving of notice to,
any governmental authority.
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5.4 LITIGATION. There is no litigation pending or, to the knowledge of the
Buyer or RPM, threatened against the Buyer or RPM which seeks to enjoin or
otherwise hinder or prevent the consummation of the transactions contemplated,
by this Agreement.
5.5 REPORTS AND FINANCIAL STATEMENTS. RPM has previously furnished to the
Company complete and accurate copies, as amended or supplemented, of its (a)
Annual Report on Form 10-K for the fiscal years ended May 31, 1996, as filed
with the Securities and Exchange Commission (the "SEC"), (b) proxy statements
relating to all meetings of its stockholders (whether annual or special) since
May 31, 1996 and (c) all other reports or registration statements filed by RPM
with the SEC since May 31, 1996 (such reports, registration statements and other
filings, together with any amendments or supplements thereto, are collectively
referred to herein as the "RPM Reports"). The RPM Reports constitute all of the
documents filed or required to be filed by RPM with the SEC since May 31, 1996.
As of their respective dates, the RPM Reports did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The audited financial
statements and unaudited interim financial statements of RPM included in the RPM
Reports (i) comply as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto, (ii) have been prepared in accordance with United States
generally accepted accounting principles applied on a consistent basis
throughout the periods covered thereby (except as may be indicated therein or in
the notes thereto, and in the case of quarterly financial statements, as
permitted by Form 10-Q under the Securities Exchange Act of 1934 (the "Exchange
Act")), (iii) fairly present the consolidated financial condition, results of
operations and cash flows of RPM as of the respective dates thereof and for the
periods referred to therein, and (iv) are consistent with the books and records
of RPM.
5.6 KNOWLEDGE. To the extent that any portion of the representations and
warranties made herein were made to the knowledge of the Buyer and RPM, such
knowledge shall be understood to mean the actual knowledge of any of the
directors or executive officers of the Buyer and RPM and shall be qualified by
and limited to such actual knowledge.
ARTICLE 6. PRE-CLOSING COVENANTS OF THE SELLERS.
The Sellers hereby covenant and agree with the Buyer as follows:
6.1 CONDUCT OF AUTOMOTIVE BUSINESS. Between the date of this Agreement and
the Closing, unless the Buyer shall otherwise consent in writing:
(i) the Sellers shall conduct the Automotive Business only in the
ordinary course on a basis consistent with past practice;
(ii) the Sellers shall refrain from making any purchase, sale or
disposition of any asset or property pertaining to the Automotive Business other
than in the ordinary course of business, from purchasing any capital asset with
respect to the Automotive Business, and from granting any security interest in,
or mortgaging, pledging, subjecting to a lien or otherwise encumbering any of
the Purchased Assets, other than those existing security interests, mortgages,
pledges, liens, conditional sale agreements and encumbrances specifically
disclosed in Schedule 4.9 hereto;
(iii) the Sellers shall use commercially reasonable efforts to keep
intact the Sellers' business organization and to preserve the goodwill of all
suppliers to, and customers, of the Automotive Business; and
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(iv) subject to the covenants and agreement of the Buyer set forth in
Section 7.1 hereof, the Sellers shall permit the Buyer and its authorized
representatives, during normal business hours and upon reasonable notice, to
have access to all properties, assets, records, tax returns, contracts and
documents related to the Automotive Business and shall furnish to the Buyer or
its authorized representatives such financial and other information with respect
to the Automotive Business or the Purchased Assets as the Buyer may from time to
time reasonably request.
6.2 AUTHORIZATION FROM OTHERS. Prior to the Closing, the Sellers will use
their best efforts to obtain all authorizations, consents and permits of others
required to permit the consummation by the Sellers of the transactions
contemplated by this Agreement.
6.3 BREACH OF REPRESENTATIONS AND WARRANTIES. Promptly upon the occurrence
of, or promptly upon becoming aware of the impending or threatened occurrence
of, any event which would cause or constitute a breach, or would have caused or
constituted a breach had such event occurred or been known to the Sellers prior
to the date hereof, of any of the representations and warranties of the Sellers
contained in or referred to in this Agreement, the Sellers shall give detailed
written notice thereof to the Buyer and shall use their best efforts to prevent
or promptly remedy the same.
6.4 DISTRIBUTION AGREEMENT. Sellers shall use their best efforts to assist
Buyer and Walmec to execute and deliver a Model Distribution Agreement as
provided in Section 2.1. Sellers shall not inform Walmec that Buyer has agreed
to accept the Model Distribution Agreement in the form attached hereto.
6.5 CONSUMMATION OF AGREEMENT. The Sellers shall perform and fulfill all
conditions and obligations on their part to be performed and fulfilled under
this Agreement, to the end that the transactions contemplated by this Agreement
shall be fully carried out.
ARTICLE 7. PRE-CLOSING COVENANTS OF BUYER AND RPM.
The Buyer and RPM hereby covenant and agree with the Sellers as follows:
7.1 CONFIDENTIALITY OF DUE DILIGENCE. The Buyer will conduct its due
diligence with respect to the Automotive Business on a confidential basis and
shall use its best efforts to ensure that any inspection or examination to be
undertaken by the Buyer of the properties, assets, records, tax returns,
contracts and documents related to the Automotive Business shall be conducted in
such a manner so as to avoid any disruption to the Sellers' operation of their
businesses, including, the Automotive Business. Each of the Buyer and RPM hereby
confirms that any and all information, records or other data which the Buyer or
RPM may obtain during any such inspection or examination shall be held by the
Buyer or RPM subject to the obligations of RPM under that certain
Confidentiality Agreement dated as of August 26, 1996 by and between Marson and
RPM, the terms of which are incorporated herein by reference and are hereby
ratified and confirmed.
7.2 AUTHORIZATION FROM OTHERS. Prior to the Closing, each of the Buyer and
RPM will use its best efforts to obtain all authorizations, consents and permits
of others required to permit the consummation by the Buyer and RPM of the
transactions contemplated by this Agreement.
7.3. BREACH OF REPRESENTATIONS AND WARRANTIES. Promptly upon the occurrence
of, or promptly upon becoming aware of the impending or threatened occurrence
of, any event which would cause or constitute a breach, or would have caused or
constituted a breach had such event occurred or been known to the Buyer or RPM
prior to the date hereof, of any of the
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representations and warranties of the Buyer or RPM contained in or referred to
in this Agreement, the Buyer or RPM, as the case may be, shall give detailed
written notice thereof to the Sellers and shall use their best efforts to
prevent or promptly remedy the same.
7.4 DISTRIBUTION AGREEMENT. Buyer shall use its best efforts to execute and
deliver a Model Distribution Agreement with Walmec as provided in Section 2.1.
7.5 CONSUMMATION OF AGREEMENT. Each of the Buyer and RPM shall perform and
fulfill all conditions and obligations on its part to be performed or fulfilled
under this Agreement, to the end that the transactions contemplated by this
Agreement shall be fully carried out.
ARTICLE 8. CONDITIONS TO OBLIGATIONS OF THE BUYER AND RPM.
The obligations of the Buyer and RPM to consummate the transactions
contemplated by this Agreement are subject to the fulfillment prior to or at the
Closing of the following conditions:
8.1 REPRESENTATIONS; WARRANTIES; COVENANTS. Each of the representations
and warranties of the Sellers set forth in Article 4 hereof shall be accurate in
all respects as if made on and as of the date of Closing as well as on the date
hereof, other than with respect to representations and warranties that refer to
or speak as of a certain date, except for changes occurring in the ordinary
course of business since the date hereof, none of which shall be material and an
officer of the Sellers shall have certified to such effect to the Buyer in
writing. The Sellers shall have performed in all respects all of those
obligations, and shall have complied in all respects with those covenants,
required to be performed or observed at or prior to the Closing, and an officer
of the Sellers shall have certified to such effect to the Buyer in writing, in
the form of Exhibit E.
8.2 SUPPLY AGREEMENT. Marson shall have executed and delivered to the
Buyer a Supply Agreement in the form attached hereto as Exhibit F ( the "Supply
Agreement") pursuant to which Marson shall agree to supply the Buyer with
Marson's products for distribution and sale at the prices and terms set forth
therein.
8.3 NONCOMPETITION AGREEMENTS. Each of the Sellers shall have executed and
delivered to the Buyer a noncompetition agreement having a five (5) year term
and being in the form attached hereto as Exhibit G-1. Orion Capital Partners,
L.P. shall have executed and delivered to the Buyer a noncompetition agreement
having a two (2) year term in the form attached hereto as Exhibit G-2. Each of
Alan Ritchie and Michael G. Brown shall have executed and delivered to the Buyer
a noncompetition agreement having a five(5) year term in the form attached
hereto as Exhibit G-3.
8.4 CONSENTS AND APPROVALS. Any and all consents or approvals which may be
required under those contracts, agreements or licenses listed on Schedule 4.13
hereof in order to consummate the transactions contemplated by this Agreement
and to transfer the Purchased Assets to the Buyer, shall have been obtained and
shall be in form and substance reasonably satisfactory to the Buyer and its
counsel.
8.5 NO MATERIAL ADVERSE CHANGE. Except as disclosed on Schedule 4.7
hereto, during the period from the date hereof to the Closing, there shall not
have been any material adverse change in the condition, financial or otherwise
or the results of operation of the Automotive Business other than changes in the
ordinary course none of which has been materially adverse, and the Sellers shall
not have sustained any damage by casualty to, or destruction of the
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Purchased Assets, whether or not insured, which materially and adversely affects
the operation of the Automotive Business.
8.6 APPROVAL OF DOCUMENTATION. All actions, proceedings, instruments and
documents required to carry out this Agreement and all related legal matters
contemplated by this Agreement shall have been approved by counsel for the
Buyer, provided that the approval of such counsel shall not be unreasonably
withheld.
8.7 ABSENCE OF CERTAIN LITIGATION. There shall not be any (i) injunction,
restraining order or order of any nature issued by any court of competent
jurisdiction which directs that this Agreement or any material transaction
contemplated hereby shall not be consummated as herein provided, (ii) suit,
action or other proceeding by any U.S. or Canadian federal, state, provincial or
local government (or any agency thereof) or pending before any court or
governmental agency, or threatened to be filed or initiated, wherein such
complainant seeks the restraint or prohibition of the consummation of any
material transaction contemplated by this Agreement or asserts the illegality
thereof, or (iii) suit, action or other proceeding by a private party pending
before any court or governmental agency, or threatened to be filed or initiated,
which, in the reasonable opinion of counsel for the Buyer, is likely to result
in the restraint or prohibition of the consummation of any material transaction
contemplated hereby or the obtaining of an amount in payment (or
indemnification) of material damages from or other material relief against the
Buyer or against any directors or officers of the Buyer in connection with the
consummation of any material transaction contemplated hereby.
8.8 MARSON'S GOOD STANDING. Buyer shall have received a good standing
certificate pertaining to Marson dated no more than ten (10) days prior to the
Closing Date from the Secretary of State of Delaware.
8.9 MCI'S GOOD STANDING. Buyer shall have received certificates of status
pertaining to MCI dated no more than ten (10) days prior to the Closing Date
from the Province of Ontario.
8.10 MCI'S TAX CLEARANCE. Buyer shall have received clearance certificates
under Section 6 of the Retail Sales Tax Act of Ontario and comparable
legislation of other provinces pertaining to MCI, each dated no more than ten
(10) days prior to the Closing Date.
8.11 OPINION. Buyer shall have received the legal opinion of Sellers'
counsel addressed to Buyer, dated as of the Closing Date, in form and substance
reasonably satisfactory to Buyer.
8.12 LIEN TERMINATIONS. Buyer shall have received terminations of all
security interests in, and releases of all liens on, the Purchased Assets,
including, but not limited to, UCC Termination Statements.
8.13 TRANSFER INSTRUMENTS. Buyer shall have received a general bill of sale
and assignment in the form of Exhibit B-1, a Patent Assignment in the form of
Exhibit B-2 and a Trademark Assignment in the form of Exhibit B-3, each signed
by the appropriate Seller and such certificates of title, endorsements,
assignments in recordable form (including, but not limited to, all of Sellers'
Intellectual Property Rights), affidavits, and other instruments of transfer as
shall be required to permit Buyer to acquire the Purchased Assets free of any
liens, adverse claims, demands, encumbrances, limitations, security interest,
option, pledge, or any other title defect or restriction of any kind, except as
otherwise provided herein.
8.14 LICENSE AGREEMENT. Each of the Sellers shall have executed and
delivered to Buyer a License Agreement in the form attached hereto as Exhibit C.
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8.15 TRANSITION SERVICE AGREEMENT. Each of Sellers shall have executed and
delivered to Buyer a Transition Service Agreement in the form attached hereto as
Exhibit H.
8.16 DISTRIBUTION AGREEMENT. If Buyer and Walmec shall have agreed to enter
into a distribution agreement which is not substantially in the form of the
Model Distribution Agreement, then Marson shall have agreed, or be deemed to
have agreed, to the Negotiated Aggregate Value proposed by the Buyer in
accordance with Section 2.1(iii) hereof.
8.17 TERMINATION OF DISTRIBUTION AGREEMENT. If Buyer and Walmec shall have
agreed to enter into a distribution agreement as provided in Section 2.1, then
Marson and Walmec shall have agreed to terminate their current distribution
agreement effective as of the Closing Date.
8.18 OTHER. Buyer shall have received each other document required to be
delivered to Buyer hereunder.
8.19 THE BUYER'S FRUSTRATION OF CLOSING CONDITIONS. Neither the Buyer nor
RPM may rely on the failure of any condition set forth in this Article 8 to be
satisfied if such failure was caused by the failure of the Buyer or RPM to act
in good faith or to use its best efforts to cause the Closing to occur, as
required under Section 7.4 hereof.
ARTICLE 9. CONDITIONS TO OBLIGATIONS OF THE SELLERS.
The obligations of the Sellers to consummate the transactions contemplated
by this Agreement are subject to the fulfillment prior to or at the Closing of
the following conditions:
9.1 REPRESENTATIONS; WARRANTIES; COVENANTS. Each of the representations
and warranties of the Buyer and RPM contained in Article 5 hereof shall be
accurate in all respects as if made on and as of the date of Closing as well as
on the date hereof, except for changes occurring in the ordinary course of
business since the date hereof, none of which shall be material and an officer
of the Buyer shall have certified to such effect to the Sellers in writing. The
Buyer and RPM shall have performed in all respects all of those obligations, and
shall have complied in all respects with those covenants, required to be
performed or observed at or prior to the Closing, and an officer of the Buyer
shall have certified to such effect to the Sellers in writing, in the form of
Exhibit I.
9.2 SUPPLY AGREEMENT. The Buyer shall have executed and delivered the
Supply Agreement to Marson.
9.3 APPROVAL OF DOCUMENTATION. All actions, proceedings, instruments and
documents required to carry out this Agreement and all related legal matters
contemplated by this Agreement shall have been approved by counsel for the
Sellers, provided that the approval of such counsel shall not be unreasonably
withheld.
9.4 ABSENCE OF CERTAIN LITIGATION. There shall not be any (i) injunction,
restraining order or order of any nature issued by any court of competent
jurisdiction which directs that this Agreement or any material transaction
contemplated hereby shall not be consummated as herein provided, (ii) suit,
action or other proceeding by any U.S. or Canadian federal, state, commonwealth
or local government (or any agency thereof) or pending before any court or
governmental agency, or threatened to be filed or initiated, wherein such
complainant seeks the restraint or prohibition of the consummation of any
material transaction contemplated by this Agreement or asserts the illegality
thereof, or (iii) suit, action or other proceeding by a private party pending
before any court or governmental agency, or threatened to be filed or initiated,
which, in the reasonable opinion of counsel for the Sellers, is likely to result
in the restraint or
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prohibition of the consummation of any material transaction contemplated hereby
or the obtaining of an amount in payment (or indemnification) of material
damages from or other material relief against the Sellers or its Affiliates or
against any directors or officers of the Sellers or its Affiliates in connection
with the consummation of any material transaction contemplated hereby.
9.5 BUYER'S GOOD STANDING. Sellers shall have received a good standing
certificate pertaining to Buyer dated no more than ten (10) days prior to the
Closing Date from the Secretary of State of Georgia.
9.6 RPM'S GOOD STANDING. Sellers shall have received a good standing
certificate pertaining to RPM dated no more than ten (10) days prior to the
Closing Date from the Secretary of State of Ohio.
9.7 OPINION. Sellers shall have received the legal opinion of counsel to
the Buyer and RPM addressed to Sellers, dated as of the Closing Date, in form
and substance reasonably satisfactory to Sellers.
9.8 EFFECTIVENESS OF REGISTRATION STATEMENT. The Form S-3 Registration
Statement pursuant to which the RPM Shares are to be registered shall have been
declared effective by the SEC, and no stop order suspending the effectiveness of
such Registration Statement shall have been issued and no proceeding for that
purpose shall have been instituted or threatened by the SEC or any state
regulatory authorities and Buyer shall have delivered to Sellers a certificate
of an officer of Buyer to such effect.
9.9 NASDAQ LISTING APPROVAL. Buyer shall provide evidence that it has
submitted a supplemental listing application to the National Association of
Securities Dealers, Inc. for the purpose of authorizing for quotation the RPM
Shares on the Nasdaq National Market and a certificate of an officer of RPM that
the RPM Shares are available for quotation on the Nasdaq National Market.
9.10 DISTRIBUTION AGREEMENT. If Buyer and Walmec shall have agreed to enter
into a distribution agreement which is not substantially in the form of the
Model Distribution Agreement, the Buyer shall have agreed, or be deemed to have
agreed, to the Negotiated Aggregate Value proposed by Marson in accordance with
Section 2.1(iii) hereof;
9.11 THE SELLERS' FRUSTRATION OF CLOSING CONDITIONS. The Sellers may not
rely on the failure of any condition set forth in this Article 9 to be satisfied
if such failure was caused by the failure of the Sellers to act in good faith or
to use all commercially reasonable efforts to cause the Closing to occur, as
required under Section 6.4 hereof.
ARTICLE 10. TERMINATION OF AGREEMENT.
10.1 TERMINATION. At any time prior to the Closing, this Agreement may be
terminated (i) by mutual consent of the Buyer and the Sellers with the approval
of their respective Board of Directors, notwithstanding prior approval of this
Agreement by the stockholders of any party, (ii) by either the Buyer or the
Sellers if there has been a material breach of a representation or warranty or
breach of covenant by the other party in its representations, warranties and
covenants set forth herein, (iii) by the Buyer if the conditions stated in
Article 8 have not been satisfied at or prior to the Closing, or (iv) by the
Sellers if the conditions stated in Article 9 have not been satisfied at or
prior to the Closing.
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10.2 EFFECT OF TERMINATION. If this Agreement shall be terminated as above
provided, all obligations of the parties hereunder shall terminate but any
breaching party shall remain liable to the non-breaching party for its damages
and out-of-pocket expenses. In the event that this Agreement is so terminated,
each party will return all papers, documents, financial statements and other
data furnished to it by or with respect to each other party to such other party
(including any copies thereof made by the first party).
10.3 RIGHT TO PROCEED. Anything in this Agreement to the contrary
notwithstanding, if any of the conditions specified in Article 8 hereof have not
been satisfied, the Buyer shall have the right to waive its right to require
fulfillment of any such condition and to proceed with the transactions
contemplated hereby, and if any of the conditions specified in Article 9 hereof
have not been satisfied, the Sellers shall have the right to waive their right
to require fulfillment of any such condition and to proceed with the
transactions contemplated hereby.
ARTICLE 11. RIGHTS AND OBLIGATIONS SUBSEQUENT TO THE CLOSING.
11.1 COLLECTION OF ASSETS. Subsequent to the Closing, the Buyer shall have
the right and authority to collect all receivables and other items transferred
and assigned to it by the Sellers hereunder and to endorse with the name of the
Sellers any checks received on account of such receivables or other items, and
the Sellers agrees that they will promptly transfer or deliver to the Buyer from
time to time, any cash or other property that the Sellers may receive with
respect to any claims, contracts, licenses, leases, commitments, sales orders,
purchase orders, receivables of any character or any other items pertaining to
the Automotive Business and transferred by them to the Buyer pursuant to the
provisions hereof.
11.2 SURVIVAL OF WARRANTIES. All representations, warranties, agreements,
covenants and obligations herein or in any schedule, certificate or financial
statement delivered by either party to the other party incident to the
transactions contemplated hereby are material, shall be deemed to have been
relied upon by the other party and shall survive the Closing in accordance with
Article 12 hereof, regardless of any investigation and shall not merge in the
performance of any obligation by either party hereto.
11.3 PRODUCT WARRANTY/LIABILITY. Although Buyer does not assume any of
Sellers' product warranty obligations for products sold prior to the Closing
Date, Buyer shall have the right after the Closing Date, on Sellers' behalf, but
only with the prior written approval of Sellers, to perform Sellers' obligations
under Sellers' product warranties for such products in accordance with Sellers'
present policy. The performance by Buyer of any of Sellers' product warranty
obligations for such products shall not give rise to any rights in Sellers.
Sellers agree to reimburse Buyer upon demand for Buyer's costs in performing
such obligations for Sellers, including, but not limited to, reasonable
out-of-pocket costs and internal labor, material and overhead costs at Buyer's
normal rates. In addition, Sellers shall name Buyer and RPM as additional
insured parties under the product liability and commercial general and excess
liability insurance policies related to the Automotive Business ("Sellers
Insurance") as maintained prior to the Closing Date by Sellers for a period
continuing after the Closing Date until the second anniversary of the Closing
Date. Buyer shall name Sellers as additional insured parties under the product
liability and commercial general and excess liability insurance policies related
to the Automotive Business ("Buyer's Insurance") as maintained by Buyer after
the Closing Date until the second anniversary of the Closing Date. Buyer and
Sellers shall each provide the other with evidence of such insurance by
delivering one copy of a Certificate of Insurance, completed by their respective
insurance carrier(s) or agents certifying that insurance coverage is in effect
and will not be canceled or materially changed until thirty (30) days after
written notice. The Buyer will, prior to the Closing, provide Sellers with
copies of the relevant summaries of policies under which the Buyer will maintain
the Buyer's Insurance.
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11.4 COBRA COMPLIANCE. Sellers will timely provide all notices and any
continuation of health benefit coverage required to be provided to any of the
Automotive Business' employees, former employees, or the beneficiaries or
dependents of such employees or former employees, under COBRA, to the extent
such notices and continuation of health benefit coverage are required to be
provided by Sellers by reason of events occurring prior to or on the Closing
Date or by reason of the transactions contemplated by this Agreement.
11.5 SECTION 22. Buyer and Sellers shall, on or promptly after the Closing,
jointly execute in prescribed form T2022 an election under Section 22 of the
Income Tax Act (Canada) and the corresponding provisions of any applicable
provincial income tax legislation with respect to the sale of accounts
receivable included in the Purchased Assets, and Buyer (and Sellers if required)
shall file such election(s) with Revenue Canada and the relevant provincial tax
authorities forthwith after execution thereof (and in any event Buyer (and
Sellers if required) shall file with its income tax return for the year of sale)
to make such election(s).
11.6 EXCISE TAX ACT. On or before the Closing, Buyer and Sellers shall
jointly execute and Buyer shall file within the prescribed time limits,
elections pursuant to Section 167 of the Excise Tax Act (Canada) and the
corresponding provisions of the equivalent Ontario legislation in the prescribed
form and containing the prescribed information in order to permit the relevant
transactions contemplated hereby to be completed without the Goods and Services
Tax, or the Ontario equivalent, being payable in respect thereof.
11.7 FURTHER COOPERATION. If, in order properly to prepare either documents
required to be filed with any governmental entity or its financial statements,
it is necessary that either party hereto be furnished with additional
information relating to the Purchased Assets or the Automotive Business of any
successors and such information is in the possession of the other party hereto,
such party agrees to use its best efforts to furnish such information to such
other party, without cost and expense to the party being furnished such
information.
ARTICLE 12. INDEMNIFICATION.
12.1 DEFINITIONS. For purposes of this Article 12:
"Losses" means all losses, damages, liabilities, payments and
obligations, and all expenses related thereto. Losses shall include any legal
fees and costs incurred by any of the Indemnified Persons subsequent to the
Closing in defense of or in connection with any alleged or asserted liability,
payment or obligation, whether or not any liability or payment, obligation or
judgment is ultimately imposed against the Indemnified Persons and whether or
not the Indemnified Persons are made or become parties to any such action, and,
in the case of a third party claim or a governmental action against an
Indemnified Person, shall also include any amounts for punitive, incidental or
consequential damages for which the third party claimant or governmental entity
receives an award against such Indemnified Persons but does not include the
punitive, incidental or consequential damages of any Indemnified Person other
than as may arise out of a third party claim or governmental action.
Notwithstanding the foregoing, the amount of any Loss suffered or incurred by an
Indemnified Person shall be reduced by the amount of any insurance proceeds
received by such Indemnified Person in respect of such Loss.
A "$2,500 Loss" means any Loss which exceeds $2,500 in amount.
The "Buyer's Indemnified Persons" means the Buyer and any entity that
directly or indirectly controls, or is controlled by, or is under common control
with, the Buyer, and their respective directors, officers, employees,
stockholders and agents.
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"Indemnified Person" means any person entitled to be indemnified under
this Article 12.
"Indemnifying Person" means any person obligated to indemnify another
entity under this Article 12.
The "Sellers' Indemnified Persons" means each of the Sellers and any
person that directly or indirectly controls, or is controlled by, or is under
common control with, the Sellers, and their respective directors, officers,
employees, stockholders and agents.
"Third Party Action" means any written assertion of a claim, or the
commencement of any action, suit, or proceeding, by a third party as to which
any person believes it may be an Indemnified Person hereunder.
12.2 INDEMNIFICATION BY THE SELLERS.
(a) Subject to the limitations in paragraph (b) below, the Sellers, jointly
and severally, shall defend, indemnify and hold harmless the Buyer's Indemnified
Persons from and against all Losses directly or indirectly incurred by or sought
to be imposed upon any of them:
(i) resulting from or arising out of any breach of any of the
representations or warranties set forth in Article 4 hereof (other than those in
Sections 4.2, 4.4, 4.8, 4.9(b), 4.9(c), 4.10 or 4.11);
(ii) resulting from or arising out of any breach of the
representations or warranties set forth in Sections 4.2, 4.4, 4.8, 4.9(b) or
4.9(c) hereof;
(iii) resulting from or arising out of any breach of the
representations or warranties set forth in Section 4.10 or 4.11;
(iv) resulting from or arising out of any breach of any covenant or
agreement made by the Sellers in this Agreement (excluding, however, any
covenants or agreements set forth in the Exhibits to this Agreement);
(v) resulting from any bulk transfer or other similar law;
(vi) resulting from or arising out of the claims of any broker,
finder, or other entity acting in a similar capacity on behalf of Sellers in
connection with the transactions herein contemplated; or
(vii) in respect of any Retained Liability.
(b) The right to indemnification under paragraph (a) is subject to the
following limitations:
(i) The Sellers shall have no liability under paragraph (a) unless
one or more of the Buyer's Indemnified Persons gives written notice to the
Sellers asserting a claim for Losses, including reasonably detailed facts and
circumstances pertaining thereto, before the expiration of the period set forth
below:
(A) for claims under clause (i) or (iii) of paragraph (a) above,
a period of 18 months following the date of the Closing; and
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(B) for all other claims, for so long as any claim may be made
in respect of such matters under any applicable statute of
limitations.
(ii) Indemnification for any Loss under clause (i) of paragraph (a)
above shall be payable by the Sellers hereunder only if such Loss is a $2,500
Loss and the aggregate amount of all $2,500 Losses hereunder by the Buyer's
Indemnified Persons shall exceed Two Hundred Thousand Dollars ($200,000), but
upon reaching such amount Sellers shall be liable to the Indemnified Persons
from the first dollar to the full extent of all such $2,500 Losses under
paragraph (a) above. The maximum aggregate liability of the Sellers for
indemnification claims for Losses under clause (i) or (iv) of paragraph (a)
above shall be Five Million Dollars ($5,000,000) and there shall be no maximum
liability for claims for Losses under clauses (ii), (iii), (v), (vi) or (vii) of
paragraph (a) above.
(iii) At their option, Sellers may repurchase from Buyer, for an
amount equal to the unpaid balance thereof, all or any part of the accounts
receivable included in the Purchased Assets which are subject to any claims for
Losses under clause (iii) of paragraph (a) above. Upon payment by Sellers of any
claims for Losses with respect to any account receivable under clause (iii) of
paragraph (a) above, Buyer shall concurrently therewith assign such accounts
receivable to Sellers free and clear of any liens.
(iv) At their option, Sellers may repurchase from Buyer, for an
amount equal to the value reflected in the Closing Balance Sheet, all or any
part of the inventory included in the Purchased Assets which is subject to any
claims for Losses under clause (iii) of paragraph (a) above. Upon payment by
Sellers for any claim for Losses with respect to any inventory under clause
(iii) of paragraph (a) above, Buyer shall concurrently therewith assign such
inventory to Sellers free and clear of any liens.
(v) The indemnification remedy provided to the Buyer and the Buyer's
Indemnified Persons shall be the exclusive remedy to which the Buyer and the
Buyer's Indemnified Persons shall be entitled after the Closing for any breach
by the Sellers of any representation or warranty or any covenant under this
Agreement (except for knowing and intentional breaches of any such
representation, warranty or covenant).
12.3 INDEMNIFICATION BY THE BUYER.
(a) Subject to the limitations in paragraph (b) below, from and after the
date of the Closing, the Buyer and RPM, jointly and severally, shall defend,
indemnify and hold harmless the Sellers' Indemnified Persons from any and all
Losses directly or indirectly incurred by or sought to be imposed upon any of
them:
(i) resulting from or arising out of any breach of any of the
representations or warranties set forth in Article 5 hereof (other than those in
Sections 5.2 and 5.3);
(ii) resulting from or arising out of any breach of the
representations or warranties set forth in Section 5.2 or 5.3 hereof;
(iii) resulting from or arising out of any breach of any covenant or
agreement made by the Buyer in this Agreement (excluding, however, any covenants
or agreements set forth in the Exhibits to this Agreement);
(iv) resulting from or arising out of the claims of any broker,
finder or other entity acting in a similar capacity on behalf of Sellers in
connection with the transactions herein contemplated; or
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(v) in respect of any Assumed Liability.
(b) The right to indemnification under paragraph (a) above is subject to
the following limitations:
(i) Neither the Buyer nor RPM shall have any liability under
paragraph (a) unless one or more of the Sellers' Indemnified Persons gives
written notice to the Buyer and RPM asserting a claim for Losses, including
reasonably detailed facts and circumstances pertaining thereto, before the
expiration of the period set forth below:
(A) for claims under clause (i) of paragraph (a) above, a period
of eighteen (18) months following the date of the Closing; and
(B) for all other claims, for so long as any claim may be made
in respect of such matters under any applicable statute of
limitations.
(ii) Indemnification for any Losses under clause (i) of paragraph (a)
above shall be payable by the Buyer or RPM hereunder only if such Loss is a
$2,500 Loss and the aggregate amount of all $2,500 Losses hereunder by the
Sellers' Indemnified Persons shall exceed Two Hundred Thousand Dollars
($200,000), but upon reaching such amount Buyer shall be liable to the
Indemnified Persons from the first dollar to the full extent of all such $2,500
Losses under paragraph (a) above. The maximum aggregate liability of the Buyer
and RPM for indemnification claims for Losses under clauses (i) and (iii) of
paragraph (a) above shall be Five Million Dollars ($5,000,000) and there shall
be no maximum liability for claims for Losses under clauses (ii), (iv) or (v) of
paragraph (a) above.
(c) The indemnification remedy provided to the Sellers and the Sellers'
Indemnified Persons shall be the exclusive remedy to which the Sellers and the
Sellers' Indemnified Persons shall be entitled after the Closing for any breach
by the Buyer or RPM of any representation or warranty or any covenant under this
Agreement (except for the provisions of Section 13 hereof and for knowing and
intentional breaches of any such representation, warranty or covenant).
12.4 DEFENSE OF THIRD PARTY ACTIONS.
(a) Promptly after receipt of notice of any Third Party Action, any person
who believes he or it may be an Indemnified Person shall give notice to the
potential Indemnifying Person of such action. The omission to give such notice
to the Indemnifying Person will not relieve the Indemnifying Person of any
liability hereunder unless it was prejudiced thereby, nor will it relieve it of
any liability which it may have other than under this Article 12.
(b) Upon receipt of a notice of a Third Party Action, the Indemnifying
Person shall have the right, at its option and at its own expense, to
participate in and be present at the defense of such Third Party Action, but not
to control the defense, negotiation or settlement thereof, which control shall
remain with the Indemnified Person, unless the Indemnifying Person makes the
election provided in paragraph (c) below.
(c) By written notice within forty five (45) days after receipt of a notice
of a Third Party Action, an Indemnifying Person may elect to assume control of
the defense, negotiation and settlement thereof, with counsel reasonably
satisfactory to the Indemnified Person; provided, however, that the Indemnifying
Person agrees (i) to promptly indemnify the Indemnified Person for its expenses
to date, and (ii) to hold the Indemnified Person harmless from and against any
and all Losses caused by or arising out of any settlement of the Third Party
Action approved by the Indemnifying Person or any judgment in connection with
that Third Party Action. The
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Indemnifying Persons shall not in the defense of the Third Party Action enter
into any settlement which does not include as a term thereof the giving by the
third party claimant of an unconditional release of the Indemnified Person, or
consent to entry of any judgment except with the consent of the Indemnified
Person.
(d) Upon assumption of control of the defense of a Third Party Action under
paragraph (c) above, the Indemnifying Person will not be liable to the
Indemnified Person hereunder for any legal or other expenses subsequently
incurred in connection with the defense of the Third Party Action, other than
reasonable expenses of investigation.
(e) If the Indemnifying Person does not elect to control the defense of a
Third Party Action under paragraph (c), the Indemnifying Person shall promptly
reimburse the Indemnified Person for expenses incurred by the Indemnified Person
in connection with defense of such Third Party Action, as and when the same
shall be incurred by the Indemnified Person.
(f) Any person who has not assumed control of the defense of any Third
Party Action shall have the duty to cooperate with the party which assumed such
defense.
12.5 MISCELLANEOUS.
(a) The Buyer's Indemnified Persons shall be entitled to indemnification
under Section 12.2 hereof and the Sellers' Indemnified Persons shall be entitled
to indemnification under Section 12.3 hereof.
(b) If any Loss is recoverable under more than one provision hereof, the
Indemnified Person shall be entitled to assert a claim for such Loss until the
expiration of the longest period of time within which to assert a claim for Loss
under any of the provisions which are applicable.
12.6 PAYMENT OF INDEMNIFICATION. Claims for indemnification under this
Article 12 shall be paid or otherwise satisfied by an Indemnifying Person within
thirty (30) days after notice thereof is given by the Indemnified Person.
ARTICLE 13. REGISTRATION.
13.1 REQUIRED REGISTRATION. RPM shall file with the SEC a registration
statement under the Securities Act on Form S-3 (or any successor short form
registration involving a similar amount of disclosure) for a public offering of
all the RPM Shares to be made on a continuous basis pursuant to Rule 415 of the
Securities Act (the "Registration Statement") and, as soon as practicable after
the execution of this Agreement, will use its best efforts to cause such
registration statement to become effective and remain continuously effective for
36 months following the Closing Date. RPM shall not permit any securities other
than the RPM Shares to be included in the Registration Statement.
13.2 EXPENSES. The expenses of registration of RPM Shares pursuant to
Section 13.1 will be paid by RPM or Buyer. For purposes of this Section 13.2,
the term "expenses" shall include federal, state and other registration and
qualification fees, legal fees and expenses for RPM's or Buyer's counsel (but
excluding the fees and expenses, if any, of counsel or other advisers to
Marson), auditing and accounting expenses incurred by RPM in connection with the
registration and printing and other related expenses including salary and
related overhead expenses of employees of RPM or Buyer for time expended by such
employees.
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13.3 INDEMNIFICATION.
(a) To the extent permitted by law, RPM will indemnify and hold harmless
each of the Sellers, their respective officers and directors, each person, if
any, who controls the Sellers within the meaning of the Securities Act or the
Exchange Act and each agent for the Sellers (within the meaning of the
Securities Act), against any losses, claims, damages or liabilities, joint or
several, to which any of them may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue or alleged untrue
statement of any material fact contained or expressly incorporated by reference
in the Registration Statement, including any preliminary prospectus or final
prospectus contained therein or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein, and will reimburse each of the
Sellers, their respective officers and directors, controlling person or agent
for any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action, as
such expenses are incurred; provided, however, that the indemnity agreement
contained in this Section 13.3(a) shall not apply to amounts paid in settlement
of any such loss, claim, damage, liability or action if such settlement is
effected without RPM's consent (which consent shall not be unreasonably
withheld) nor shall RPM be liable in any such case for any such loss, claim,
damage, liability or action to the extent that it arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged omission
made in connection with the Registration Statement, preliminary prospectus,
final prospectus or amendment or supplement thereto in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by Sellers, their respective officers and directors, any
such controlling person or agent. The Sellers acknowledge and agree that the
indemnity agreement contained in this Section 13.3(a) shall be limited to an
agreement for the benefit of the Sellers, their respective officers and
directors, their controlling persons and their agents and shall not be construed
to obligate RPM to indemnify, or agree to indemnify, in any respect, any other
person or entity who may act as an underwriter, broker or dealer in connection
with the sale, purchase or distribution of any of the RPM Shares.
(b) To the extent permitted by law, each of the Sellers will indemnify and
hold harmless RPM, each of its directors, each of its officers who have signed
the Registration Statement, each person, if any, who controls RPM within the
meaning of the Securities Act or the Exchange Act, and each agent for RPM
(within the meaning of the Securities Act), as the case may be, against any
losses, claims, damages or liabilities to which RPM or any such director,
officer, controlling person or agent may become subject, under the Securities
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereto) arise out of or are based upon any untrue or alleged
untrue statement of any material fact contained or expressly incorporated by
reference in the Registration Statement, including any preliminary prospectus or
final prospectus contained therein or any amendment or supplement thereto, or
arise out of or based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in the Registration Statement, preliminary prospectus, final
prospectus, or
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amendments or supplements thereto, in reliance upon and in conformity with
written information furnished by Sellers expressly for use in connection with
such registration; and the Sellers will reimburse any legal or other expenses
reasonably incurred by RPM or any such director, officer, controlling person or
agent, as the case may be, in connection with investigating or defending any
such loss, claim, damage, liability or action. It is agreed that the indemnity
agreement contained in this Section 13.3(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Sellers (which consent shall
not be unreasonably withheld).
(c) Promptly after receipt by a party indemnified under this Section 13.3
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party under this
Section 13.3, notify the indemnifying party in writing of the commencement
thereof and the indemnifying party shall have the right to participate in, and,
to the extent the indemnifying party desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with counsel
mutually satisfactory to the parties. The failure to notify any indemnifying
party promptly of the commencement of any such action, if prejudicial to his
ability to defend such action, shall relieve such indemnifying party of any
liability to the indemnified party under this Section 13.3, but the omission so
to notify the indemnifying party will not relieve him of any liability which he
may have to any indemnified party other than under this Section 13.3.
ARTICLE 14. GENERAL PROVISIONS.
14.1 FEES AND EXPENSES. Each of the parties will bear its own expenses in
connection with the negotiation and the consummation of the transactions
contemplated by this Agreement, and no expenses of the Sellers relating in any
way to the purchase and sale of the Automotive Business and the Purchased Assets
hereunder shall be charged to or included in any account of the Automotive
Business as of the Closing. Except for sales taxes which may be payable in
connection with the transfer of the Purchased Assets and which will be paid by
Buyer when due and payable, Sellers shall pay all transfer or other taxes, if
any, which may be payable in connection with the transfer of the Purchased
Assets pursuant to this Agreement. The Sellers have agreed, pursuant to Section
11.6 hereof, to file jointly with Buyer elections pursuant to Section 167 of the
Excise Tax Act (Canada) and corresponding provisions of the equivalent Ontario
legislation in order to permit the transactions contemplated hereby to be
completed without the Goods and Services Tax, or the Ontario equivalent, being
payable in respect thereof. The Buyer will indemnify the Sellers against any
tax, interest or penalties arising from a determination that the conditions for
filing the elections pursuant to Section 167 of the Excise Tax Act (Canada) or
the corresponding provisions of the equivalent Ontario legislation have not been
satisfied for any reasons other than the inaccuracy of any of the
representations and warranties made by the Sellers in completing the required
elections under the Excise Tax Act (Canada) or the corresponding provisions of
the equivalent Ontario legislation.
14.2 NOTICES. Any and all notices or other communications required or
permitted to be given in connection with this Agreement shall be in writing (or
in the form of a facsimile transmission) addressed as provided below shall be
(i) delivered by hand, (ii) transmitted by facsimile with receipt confirmed,
(iii) delivered by overnight courier service with confirmed receipt or (iv)
mailed by first class U.S. mail, postage prepaid and registered or certified,
return receipt requested:
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ASSET PURCHASE AGREEMENT
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<PAGE> 35
If to the Sellers to:
Marson Corporation
130 Crescent Avenue
P.O. Box 505767
Chelsea, Massachusetts 02150-3086
Attention: Alan Ritchie, Chairman and Chief Executive Officer
Facsimile Number: (617) 889-0963
Marson Canada Inc.
c/o Marson Corporation.
130 Crescent Avenue
P.O. Box 505767
Chelsea, Massachusetts 02150-3086
Attention: Alan Ritchie, President
Facsimile Number: (617) 889-0963
with a copy to:
Paul J. Hartnett, Jr., Esq.
Brown, Rudnick, Freed & Gesmer, P.C.
One Financial Center
Boston, Massachusetts 02111
Facsimile Number: (617) 856-8201
If to the Buyer, to:
Dynatron/Bondo Corporation
3700 Atlanta Industrial Parkway
Atlanta, Georgia 30331
Attention: President
Facsimile Number: (404) 696-5614
If to RPM, to:
RPM, Inc.
2628 Pearl Road
Medina, Ohio 44258
Attention: General Counsel
Facsimile Number: (330) 225-8743
And, in each case, with a copy to:
Calfee, Halter & Griswold
1400 McDonald Investment Center
800 Superior Avenue
Cleveland, Ohio 44114-2688
Attention: William A. Papenbrock, Esquire
Facsimile Number: (216) 241-0816
and in any case at such other address as the addressee shall have specified by
written notice. Any notice or other communication given in accordance with this
Section 14.2 shall be deemed delivered and effective upon receipt, except those
notices and other communications sent by
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ASSET PURCHASE AGREEMENT
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<PAGE> 36
mail, which shall be deemed delivered and effective three (3) business days
following deposit with the United States Postal Service. All periods of notice
shall be measured from the date of delivery thereof.
14.3 PUBLICITY AND DISCLOSURES. Except as required by law, prior to the
Closing Date no press releases or any public disclosure, either written or oral,
of the transactions contemplated by this Agreement shall be made without the
prior knowledge and written consent of both the Buyer and the Sellers. If such a
public notice is required by law, the disclosing party will use its best efforts
to give the other prior written notice of the disclosure to be made.
14.4 ENTIRE AGREEMENT. This Agreement (including all exhibits or schedules
appended to this Agreement, all of which are hereby incorporated herein by
reference) constitutes the entire agreement between the parties, and all
promises, representations, understandings, warranties and agreements with
reference to the subject matter hereof and inducements to the making of this
Agreement relied upon by any party hereto, have been expressed herein or in the
documents incorporated herein by reference.
14.5 SEVERABILITY. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision hereof.
14.6 BULK SALES LAW. Buyer waives compliance by Sellers with the
obligations imposed on vendors under the Bulk Sales Act, or the equivalent, as a
result of the transactions contemplated by this Agreement. Sellers agree, in
accordance with the provisions of Article 12 hereof, to indemnify and hold Buyer
harmless from and against any loss incurred by Buyer as a result of such waiver.
14.7 ASSIGNABILITY. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors and assigns. The
Buyer has informed the Sellers that Buyer intends to merge with and into
Mar-Hyde Corporation, an Ohio corporation which is another wholly-owned
subsidiary of RPM, and that following such merger, the surviving corporation
will be known as "Bondo/Mar-Hyde Corporation." The Sellers hereby acknowledge
and agree that Bondo/Mar-Hyde Corporation will be the successor by merger to the
rights and obligations of Buyer under this Agreement.
14.8 AMENDMENT. This Agreement may be amended only by a written agreement
executed by the Buyer and the Sellers.
14.9 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed in original but all of which
together shall constitute one and the same instrument.
14.10 EFFECT OF TABLE OF CONTENTS AND HEADINGS. The table of contents and
the titles of article and section headings herein contained has been provided
for convenience of reference only and shall not affect the meaning of
construction of any of the provisions hereof.
14.11 WAIVERS. Compliance with any condition or covenant set forth herein
may not be waived except by writing duly executed by the party or parties to be
bound. No delay on the part of any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereto, and any waiver on the
part of any party of any such right, power or privilege, or any single or
partial exercise thereof shall not preclude any further exercise thereof or the
exercise of any other such right, power or privilege.
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ASSET PURCHASE AGREEMENT
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<PAGE> 37
14.12 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware (other than the choice of law
principles thereof).
14.13 PRONOUNS. The use of a particular pronoun herein shall not be
restrictive as to gender or number but shall be interpreted in all cases as the
context may require.
14.14 TIME PERIODS. Any action required hereunder to be taken within a
certain number of days shall be taken within that number of calendar days;
PROVIDED, HOWEVER, that if the last day for taking action falls on a weekend or
a holiday, the period during which such action may be taken shall be
automatically extended to the next business day.
14.15 NO STRICT CONSTRUCTION. The language used in this Agreement will be
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction will be applied against either party.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in multiple counterparts as of the date set forth above by their duly
authorized representatives.
MARSON CORPORATION
By: /s/ Alan Ritchie
-------------------------------------------
Name: Alan Ritchie
Title: Chairman and Chief Executive Officer
MARSON CANADA INC.
By: /s/ Alan Ritchie
-------------------------------------------
Name: Alan Ritchie
Title: President
DYNATRON/BONDO CORPORATION
By: /s/ L. Joseph Lee
-------------------------------------------
Name: L. Joseph Lee
Title: Vice President
RPM, INC.
By: /s/ L. Joseph Lee
-------------------------------------------
Name: L. Joseph Lee, authorized signatory
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ASSET PURCHASE AGREEMENT
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<PAGE> 38
ASSET PURCHASE AGREEMENT
LIST OF SCHEDULES AND EXHIBITS
Schedule 1.1(iii) - Marson Contracts
Schedule 1.1 (v) - Employees to be Offered Employment by the Buyer
Schedule 1.1(vi) - Trademarks included among the Purchased Assets
Schedule 1.2 - Certain Retained Accounts Receivable
Schedule 2.3 - Aggregate Consideration Allocation
Schedule 4.5 - Financial Statements of the Sellers
Schedule 4.6 - Liabilities not reflected on the Base Balance Sheet
Schedule 4.7 - Changes Since Base Balance Sheet Date
Schedule 4.8 - Tax Claims, Audits and Proceedings
Schedule 4.9 - Leases, Machinery, Equipment and other Property
Schedule 4.10 - Aging Schedule of Accounts Receivable as of
November 30, 1996
Schedule 4.11 - Inventories
Schedule 4.12 - Intellectual Property Rights
Schedule 4.13 - Material Contracts
Schedule 4.14 - Environmental Matters
Schedule 4.15 - Permits
Schedule 4.16 - Litigation
Schedule 4.17 - Transactions with Interested Persons
Schedule 4.18 - Persons Deemed to Have Knowledge
Schedule 4.20 - Product Warranty Matters
Schedule 4.21 - Product Liability Claims and Related Matters
Schedule 4.22 - Certain Customers and Suppliers
Schedule 4.24 - Purchased Asset Locations
Schedule 4.25 - Salary and Employee Benefits of Certain Employees
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ASSET PURCHASE AGREEMENT
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<PAGE> 39
Exhibit A: Walmec Distribution Agreement
Exhibit B-1: Bill of Sale
Exhibit B-2: Patent Assignment
Exhibit B-3: Trademark Assignment
Exhibit C: License Agreement
Exhibit D: Instrument of Assumption
Exhibit E: Sellers' Closing Certificate
Exhibit F: Supply Agreement
Exhibit G-1: Marson Noncompetition Agreement
Exhibit G-2: Orion Noncompetition Agreement
Exhibit G-3: Ritchie/Brown Noncompetition Agreement
Exhibit H: Transition Service Agreement
Exhibit I: Buyer's Closing Certificate
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ASSET PURCHASE AGREEMENT
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<PAGE> 1
EXHIBIT 5.1
January 6, 1997
RPM, Inc.
2629 Pearl Road
P.O. Box 777
Medina, Ohio 44258
In connection with the filing by RPM, Inc., an Ohio
corporation (the "Company"), with the Securities and Exchange Commission under
the provisions of the Securities Act of 1933, as amended, of a resale
Registration Statement on Form S-3 (the "Registration Statement") with respect
to up to 906,667 Common Shares, without par value, of the Company (the
"Shares"), we have examined the following: (i) the Amended Articles of
Incorporation and Code of Regulations of the Company, as the same are currently
in effect; (ii) the form of Registration Statement on Form S-3 (including
Exhibits thereto) to be filed with the Securities and Exchange Commission; and
(iii) such other documents as we deemed necessary to examine as a basis for the
opinions hereinafter expressed. The Shares are to be issued to the selling
shareholder named in the Registration Statement (the "Selling Shareholder")
pursuant that certain Asset Purchase Agreement dated as of December 30, 1996
(the "Purchase Agreement") entered into by and among the Company, Bondo/Mar-Hyde
Corporation (the successor corporation to Dynatron/Bondo Corporation), Marson
Corporation , a Delaware corporation ("Marson") and Marson Canada, Inc., a
Canadian corporation ("Marson Canada"). It is contemplated by the Purchase
Agreement that the Registration Statement will be declared effective for resales
of the Shares concurrently with the issuance of the Shares to the Selling
Shareholder.
Based upon the foregoing, we are of the opinion that:
(i) The Company is incorporated and validly existing
under the laws of the State of Ohio.
(ii) The Shares to be sold by the Selling Shareholder in the
manner contemplated by the Registration Statement have been duly authorized and
when issued to the Selling Shareholder in accordance with the terms of the
Purchase Agreement will be legally issued, fully paid for and nonassessable.
We are attorneys licensed to practice law in the State of
Ohio. The opinion expressed herein is limited solely to the laws of the State of
Ohio and we express no opinion under the laws of any other jurisdiction.
This opinion is delivered to you solely in connection with the
filing of the Registration Statement with respect to the Shares, and this letter
and the opinion stated herein may not be relied upon for any other purpose or by
any persons other than Directors and officers of the Company.
<PAGE> 2
We hereby consent to the filing of this opinion as Exhibit
5.1 to the Registration Statement and to the use of our name therein under the
caption "Validity of Shares."
Very truly yours,
Calfee, Halter & Griswold LLP
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
July 3, 1996 which appears in the Annual Report on Form 10-K for the fiscal year
ended May 31, 1996 of RPM, Inc. and of our report on the Financial Statement
Schedules which appears in such Annual Report on Form 10-K . We also consent to
the reference to our firm made under the heading "EXPERTS" in the Prospectus.
/s/ CIULLA, SMITH & DALE, LLP
-------------------------------
CIULLA, SMITH & DALE, LLP
Cleveland, Ohio
December 30, 1996
