EX-10.1






	 
	Asset Purchase Agreement

Dated as of September 29, 2008

By And Between

Novolyte Technologies LP

on the one hand

and

Ferro Corporation

on the other hand

	 







1




Table of Contents




Page




	 	 	 	 	 	 	 	 	 
	Asset Purchase Agreement
	 	 	1	 
	Recitals
	 	 	 	 	 	 	1	 
	Terms and Conditions
	 	 	1	 
	Article 1 — General Provisions
	 	 	 	 
	1.1
	 	Definitions	 	 	 	 
	1.2
	 	Construction	 	 	 	 
	Article 2 — Purchase and Sale
	 	 	 	 
	2.1
	 	Transaction	 	 	 	 
	2.2
	 	Acquired Assets	 	 	 	 






(A) Specified Acquired Assets


(B) Other Acquired Assets



	 	 	 
	2.3

2.4

2.5

2.6

2.7

	 	Retained Assets

Assumed Liabilities

Retained Liabilities

Purchase Price

Adjustment






(A) Closing Adjustments.




	 	(1)	 	Closing Date Certificate






	 	(2)	 	No Notice of Objection






	 	(3)	 	Notice of Objection





(B) Post Closing Adjustments.




	 	(1)	 	Closing Statement






	 	(2)	 	Ferro’s Review






	 	(3)	 	Informal Negotiations






	 	(4)	 	Dispute Resolution






	 	(5)	 	Working Capital Collar






	 	(6)	 	Closing Working Capital






	 	(7)	 	Amount of Adjustment





2.8 Payment of Purchase Price


2.9 Method of Payment



(A) Directed Payments


(B) Other Payments



	 	 	 
	2.10

	 	Allocation of Consideration
	Article 3 — Actions Before Closing

	3.1

3.2

3.3

3.4

3.5

3.6

3.7

3.8

3.9

3.10

3.11

3.12

	 	Access to Records

Interim Conduct of the Fine Chemicals Business

Novolyte’s Approval of Certain Transactions

Negotiation of Other Agreements

Consents

Coordination of Public Announcements

Regulatory Approvals

Novolyte’s Financing

Exclusivity

Contact with Certain Employees

Contact with Customers

Contact with Suppliers
	Article 4 — Conditions

	4.1

4.2

4.3

Article 5 — Closing

5.1

5.2

5.3

5.4

5.5

	 	Conditions to Novolyte’s Obligations

Conditions to Ferro’s Obligations

Parties’ Best Commercial Efforts



The Closing

Date, Time, and Place of Closing

Novolyte’s Obligations

Ferro’s Obligations

U.S. Real Estate Conveyance






(A) Title Commitments, Title Policy and Surveys


(B) Title Company


(C) Deed


(D) Instructions


(E) Confirmation



	 	 	 
	Article 6 — Actions After Closing

	6.1

6.2

6.3

6.4

6.5

	 	Suzhou Equity Transfer and Local Formalities

Further Conveyances

Further Consents

Accounting Reports

Non-Competition; Non-Solicitation.






(A) Generally


(B) Additional Agreements if Suzhou Equity Transfer Is Not Consummated


(C) Relief and Other Matters



	 	 	 
	6.6

6.7

6.8

6.9

	 	Access to Former Business Records

Access to Former Employees

Insurance Coverage

Trade Accounts Receivable/Collections
	Article 7 — Representations and Warranties

	7.1

	 	Ferro’s Representations and Warranties Generally






(A) Organization and Existence


(B) Capitalization of Ferro Suzhou


(C) Power and Authority


(D) Authorization


(E) Binding Effect


(F) No Default


(G) Finders


(H) HSR Act



7.2 Representations and Warranties Concerning the Fine Chemicals Business



(A) Organization


(B) Financial Statements


(C) Inventories


(D) Trade Accounts Receivable


(E) Trade Accounts Payable


(F) Real Property


(G) Tangible Personal Property


(H) Intellectual Property


(I) Indebtedness


(J) Litigation


(K) Contracts and Commitments


(L) Employees and Employee Benefits


(M) Compliance with Environmental Laws


(N) Compliance with Health and Safety Laws


(O) Compliance with Other Laws


(P) Taxes


(Q) Insurance


(R) No Material Events


(S) Acquired Assets


(T) Undisclosed Liabilities


(U) Suppliers


(V) Customers



7.3 Novolyte’s Representations and Warranties



(A) Organization and Existence


(B) Power and Authority


(C) Authorization


(D) Binding Effect


(E) No Default


(F) Finders


(G) Novolyte’s Financing Plan


(H) Hart Scott Rodino



	 	 	 
	7.4

7.5

	 	Meaning of “Ferro’s Knowledge”

Disclaimer
	Article 8 — Specific Obligations

	8.1

	 	Employee Obligations






(A) Employment


(B) Terms of Employment


(C) Pay and Benefits


(D) Severance and Bonuses


(E) Non-Interference


(F) Third Party Beneficiaries.



8.2 Environmental Obligations



(A) Identified Environmental Matters


(B) Unknown Environmental Matters.




	 	(1)	 	Environmental Investigations and Testing






	 	(2)	 	Procedure






	 	(3)	 	Responsibilities






	 	(4)	 	Limitations





(C) Novolyte’s Sole Responsibilities



	 	 	 
	8.3

8.4

8.5

	 	Novolyte’s Sole Remedy

Disclosure Schedules Updates.

Coordination of Public Announcements After the Closing
	Article 9 — Indemnification

	9.1

9.2

9.3

	 	Indemnification of Ferro

Indemnification of Novolyte

Claims






(A) Notice


(B) Responsibility for Defense


(C) Right to Participate


(D) Settlement


(E) Tax Claims



	 	 	 
	9.4

9.5

9.6

9.7

9.8

9.9

9.10

	 	Disputed Responsibility

Quantum Limitation on Indemnification

Time Limitation on Indemnification

Actual Amount

Materiality

Exclusive Remedies

Indemnity Payments as Adjustments
	Article 10 — Dispute Resolution

	10.1

10.2

10.3

	 	Dispute Notice

Informal Negotiations

Dispute Resolution Proceedings






(A) Designation of Representatives


(B) Selection of Neutral


(C) Procedures and Process


(D) Decision



	 	 	 	 	 
	10.4Equitable Relief

10.5Binding Effect

	 	



	 	



	Article 11 -	 	- Amendment, Waiver and Termination
	11.1Amendment

11.2Waiver

11.3Termination

	 	





	 	





	11.4Effect of Termination
	 	 
	Article 12 -

12.1Severability

	 	- Miscellaneous



	 	



	12.2Costs and Expenses
	 	 
	12.3Notices

12.4Assignment

12.5No Third Parties

	 	





	 	





	12.6Incorporation by Reference
	 	 
	12.7Governing Law

12.8Bulk Sales

12.9Counterparts

	 	





	 	





	12.10Complete Agreement
	 	 
	12.11Disclosure Schedules
	 	 






2




	 	 	 	 	 
	Appendices

Appendix A

Appendix A-1-

Appendix B

Appendix C

Appendix D

Appendix E

Appendix F

Appendix G

Appendix H

Appendix I

Appendix J

Appendix K

Appendix L

Appendix M

Appendix N

Appendix O

Appendix P

Appendix Q

Appendix R-1-

Appendix R-2-

Appendix S

Appendix T

Appendix U

Appendix V

Appendix W

Appendix X

Appendix Y

	 	

-

Products

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Identified Environmen

Unknown Environmental

-

-

-

-

-

-

-
	 	

Definitions



Specified Acquired Assets

Retained Assets

Retained Liabilities

Calculation of Working Capital Collar

Accounting Principles

Escrow Agreement

Intentionally Omitted

Other Agreements

Documents to Be Delivered by Ferro at the Closing

Documents to Be Delivered by Novolyte at the Closing

Suzhou Equity Transfer Agreement

Contents of the Fine Chemicals Business Disclosure Schedule

Due Diligence Certifications

Excluded Employees and Employees Retired or Terminated

Since April 14, 2008

Employees

Employee Benefit and Welfare Plans

tal Matters

Matters

Unconditional Guarantee

PAD (Baton Rouge) Tolling Agreement

Walton Hills Tolling Agreement

Management and Transition Service Agreement

Material Terms of U.S. Transition Service Agreement

Material Terms of U.S. Transition Service Agreement

Required Consents








3






Asset Purchase Agreement




This Asset Purchase Agreement (this “Purchase Agreement”) is dated as of September
29, 2008, and is by and between:



Novolyte Technologies LP (“Novolyte”), a Delaware limited partnership, on the one
hand,



- and -




Ferro Corporation (“Ferro”), an Ohio corporation, on the other hand.



Recitals





	A.	 	Ferro owns 100% of the equity interest (the “Suzhou Equity Interest”) of Ferro (Suzhou)
Energy Storage Materials Co. Ltd. (“Ferro Suzhou”), a wholly owned foreign enterprise
established under the applicable laws and regulations of the People’s Republic of China (the
“P.R.C.”), having its legal address at No. 15 Suhong East Road, Suzhou Industrial Park, Suzhou
City, Jiangsu Province, P.R.C.






	B.	 	Ferro and Ferro Suzhou are engaged in the worldwide business (as currently conducted by each
of Ferro and Ferro Suzhou, the “Fine Chemicals Business”) of designing, developing,
formulating, manufacturing, marketing and selling the products listed on Appendix A-1 to this
Agreement (the “Products”).






	C.	 	Novolyte desires to purchase from Ferro, and Ferro desires to sell to Novolyte, the Fine
Chemicals Business on and subject to the terms and conditions of this Purchase Agreement.






	D.	 	Simultaneously with the Closing of this Purchase Agreement, Ferro and Novolyte or its
assignee are entering into that certain Suzhou Equity Transfer Agreement, the form of which is
attached as Appendix L (the “Suzhou Equity Transfer Agreement”), which Suzhou Equity Transfer
Agreement will be filed after the Closing pursuant to the terms thereof with the appropriate
governmental authorities in the P.R.C. in order to obtain approval of the transfer and sale of
the Suzhou Equity Interest to Novolyte (the “Suzhou Equity Transfer”)





Terms and Conditions




In consideration of the matters recited above and of other good and valuable consideration, and
intending to be legally bound by this Purchase Agreement, Novolyte and Ferro hereby agree as
follows:



Article 1 — - General Provisions




	1.1	 	Definitions. Appendix A sets forth the definitions of certain terms used in this Purchase
Agreement. Those terms shall have the meanings set forth on Appendix A where used in this
Purchase Agreement and identified with initial capital letters.






	1.2	 	Construction. For purposes of this Purchase Agreement, except where the context otherwise
requires —






	 	(A)	 	The term “parties” means Novolyte and Ferro.






	 	(B)	 	The term “person” includes any natural person, firm,
association, partnership, corporation, limited liability company, limited
liability partnership, governmental agency, or other entity.






	 	(C)	 	The term “today” means September 29, 2008.






	 	(D)	 	All currency amounts stated in this Purchase Agreement are in
United States Dollars.






	 	(E)	 	References to “days” mean calendar days. (If, however, an
action or obligation is due to be undertaken by or on a day other than a
business day, i.e., a Saturday, Sunday, or public holiday, in the United
States, then that action or obligation will be deemed to be due on the next
following business day.)






	 	(F)	 	When introducing a series of items, the term “including” is not
intended to limit the more general description that precedes the items listed.






	 	(G)	 	The Table of Contents and the headings of the Articles and
Sections are included for convenience of reference only and are not intended to
affect the meaning of the operative provisions to which they relate.





	 	 	 
	Article 2 Purchase and Sale
	2.1

	 	Transaction. On and subject to the terms and conditions of this Purchase Agreement,







	 	(A)	 	At the Closing and except as otherwise contemplated by the
Suzhou Equity Transfer Agreement, Novolyte will purchase from Ferro, and Ferro
will sell, transfer, and assign to Novolyte, Ownership of all of the Acquired
Assets (as defined in Section 2.2);






	 	(B)	 	At the Closing and except as otherwise contemplated by the
Suzhou Equity Transfer Agreement, Novolyte will assume and become directly and
solely responsible for the payment or discharge of all of the Assumed
Liabilities (as defined in Section 2.4);






	 	(C)	 	Novolyte will pay Ferro the Purchase Price as provided in
Section 2.8.






Notwithstanding such transaction, Ferro will retain the Retained Assets (as defined in
Section 2.3) and the Retained Liabilities (as defined in Section 2.5).




	2.2	 	Acquired Assets. For purposes of this Purchase Agreement and except as otherwise set forth
in Section 2.3, the term “Acquired Assets” means all of Ferro’s rights, title, and interest in
and to the Specified Acquired Assets (as defined in Section 2.2(A)), as well as all of Ferro’s
rights, title, and interest in and to those assets used primarily in Ferro’s conduct of the
Fine Chemicals Business and described in Section 2.2(B) hereof, as the same shall exist as of
the Closing, as follows:






	 	(A)	 	Specified Acquired Assets. The Acquired Assets include all of Ferro’s rights,
title and interest in and to the following specified assets (the “Specified Acquired
Assets”):






	 	(1)	 	All registered Intellectual Property Owned or used by Ferro and
its Affiliates primarily related to the Fine Chemicals Business as more
specifically described in Part H of Appendix M hereto, together with the
Intellectual Property described on Appendix B hereto (“Acquired Intellectual
Property”);






	 	(2)	 	The assets located at The Posnick Center of Innovative
Technology, 7500 East Pleasant Valley Road, Independence, Ohio 44131 (the
“Posnick Location”) specifically listed on Appendix B hereto (the “Acquired
Posnick Assets”);






	 	(3)	 	The assets located at 7061 East Pleasant Valley Road,
Independence, Ohio 44141 (the “Independence Woods Location”) specifically
listed on Appendix B hereto (the “Acquired Independence Woods Assets”);






	 	(4)	 	The assets of Ferro Japan K.K. (“Ferro Japan”) located at 8F,
House Hamamatsu-cho Bldg., 2-7-1 Hamamatsu-cho, Minato-ku, Tokyo 105-0013 Japan
(the “Japanese Location”) specifically listed on Appendix B hereto (the
“Acquired Japanese Assets”);






	 	(5)	 	The assets located at 7050 Krick Road, Walton Hills, OH
44146-4494 (the “Walton Hills Location”) specifically listed on Appendix B
hereto (the “Acquired Walton Hills Assets”);






	 	(6)	 	The Suzhou Equity Interest; and






	 	(7)	 	Except as otherwise described in Section 2.3, all assets
located at the Baton Rouge Location.






	 	(B)	 	Other Acquired Assets. In addition to the Specified Acquired Assets, the
Acquired Assets include all of Ferro’s rights, title, and interest in and to those
assets used primarily in Ferro’s conduct of the Fine Chemicals Business and described
in this Section 2.2(B) hereof, including without limitation:






	 	(1)	 	All Acquired Trade Accounts Receivable;






	 	(2)	 	All Acquired Inventories;






	 	(3)	 	All Acquired Prepaid Items;






	 	(4)	 	All Acquired Tangible Personal Property;






	 	(5)	 	All Acquired Real Property;






	 	(6)	 	So far as they can be or are lawfully assigned, transferred to,
or held in trust for Novolyte, all Acquired Contracts, Acquired Leases,
Acquired Licenses, and Acquired Permits;






	 	(7)	 	All Acquired Third-Party Claims;






	 	(8)	 	To the extent not attorney-client privileged, all Acquired
Business Records;






	 	(9)	 	The Inventories and Trade Accounts Receivable of Ferro Belgium
Sprl (“Ferro Belgium”) exclusively related to the Fine Chemicals Business and
the Business Records exclusively related to the Inventories, Trade Accounts
Receivable and Trade Accounts Payable of Ferro Belgium; and






	 	(10)	 	All claims, deposits, prepayments, prepaid expenses,
warranties, guarantees, refunds, causes of action, rights of recovery, rights
of set-off and rights of recoupment of every kind and nature (whether or not
known or unknown or contingent or non-contingent) of Ferro with respect to any
of the Acquired Assets or Assumed Liabilities.






	2.3	 	Retained Assets. For purposes of this Purchase Agreement, the term “Retained Assets” means
the following rights, properties, and assets as the same shall exist as of the Closing:






	 	(A)	 	All Cash;






	 	(B)	 	All rights, properties, and assets of Ferro that are used
primarily in any business or businesses other than the Fine Chemicals Business;






	 	(C)	 	Other than the Acquired Intellectual Property and the
Intellectual Property described on Appendix B, all other Intellectual Property
including all trademarks registered in the name of Ferro and its Affiliates
and, whether or not registered, the names and trademarks “Ferro” and
“Check-in-a-Circle” logo and the goodwill associated with such names, marks,
and logos;






	 	(D)	 	All causes of action, rights of action, and warranty and
product liability claims against other persons that relate to Retained Assets
or Retained Liabilities;






	 	(E)	 	Subject to Section 6.8, all policies of insurance and claims
and rights under such policies of insurance, whether or not related to the Fine
Chemicals Business, the Acquired Assets, or the Assumed Liabilities;






	 	(F)	 	All Business Records and all financial, operating, inventory,
legal, personnel, payroll, and customer records and all sales and promotional
literature, correspondence, and records, other than the Acquired Business
Records and the Business Records of Ferro Suzhou;






	 	(G)	 	Except for Foreign Plans maintained by Ferro Suzhou, all assets
of Employee Benefit Plans and Foreign Plans;






	 	(H)	 	Except for the Acquired Walton Hills Assets, all assets used in
the conduct of the Fine Chemicals Business located at the Walton Hills
Location, including without limitation the “epoxidation” technology and assets;






	 	(I)	 	All assets, whether or not used by Ferro primarily in the
conduct of the Fine Chemicals Business, which are identified as Retained Assets
on Appendix C;






	 	(J)	 	All assets of Ferro Belgium not specifically described in
Section 2.2(B)(9);






	 	(K)	 	Other than the Acquired Posnick Assets, all other assets
located at the Posnick Location;






	 	(L)	 	Other than the Acquired Independence Woods Assets, all other
assets located at the Independence Woods Location;






	 	(M)	 	Other than the Acquired Japanese Assets, all other assets of
Ferro Japan; and






	 	(N)	 	The assets located at the Acquired Real Property which are used
to toll products for the PAD division of Ferro and which are identified as
Retained Assets on Appendix C.






	2.4	 	Assumed Liabilities. For purposes of this Purchase Agreement, the term “Assumed Liabilities”
means only the following liabilities and obligations (including only the following liabilities
and obligations of Ferro Suzhou) arising out of and directly relating to Ferro’s conduct of
the Fine Chemicals Business and existing at the Closing or, only with respect to Section 8.1,
Novolyte’s Employee Obligations arising immediately after the Closing, and no other
liabilities or obligations (whether known or unknown, whether asserted or unasserted, whether
absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and
whether due or to become due and regardless of when asserted):






	 	(A)	 	All Assumed Trade Accounts Payable;






	 	(B)	 	All liabilities and obligations that arise at or after the
Closing under the Acquired Contracts, Acquired Leases, Acquired Licenses, and
Acquired Permits to Novolyte under this Purchase Agreement and all liabilities
that arise at or after the Closing under the Contracts, Leases, Licenses and
Permits of Ferro Suzhou (other than any such liabilities or obligations that
arise out of any breach or alleged breach before the Closing);






	 	(C)	 	All liabilities and obligations arising out of an injury to
person or damage to property caused by a product manufactured by Ferro at the
Baton Rouge Location or the Suzhou Location and sold by Novolyte or its
Affiliates after the Closing to the extent such injury is or is alleged to be
the result of a modification to such product by Novolyte, its Affiliates,
agents or assigns, or such product was manufactured by Ferro in accordance with
its specifications but sold by Novolyte, its Affiliates, agents or assigns
outside of such product’s specifications;






	 	(D)	 	Novolyte’s Employee Obligations (as defined in Section 8.1);






	 	(E)	 	Novolyte’s Environmental Obligations (as defined in Section
8.2);






	 	(F)	 	Costs and expenses for which Novolyte is responsible under
Section 12.2;






	 	(G)	 	All liabilities and obligations of the Fine Chemicals Business
that have not been fully satisfied or performed as of the Closing and that
arise or have arisen out of the conduct of the Fine Chemicals Business solely
to the extent that such liabilities and obligations have occurred in the
ordinary course of business and are reflected on the balance sheet of the Fine
Chemicals Business as of the Closing as set forth on Schedule 2.4(G); and






	 	(H)	 	All Trade Accounts Payable of Ferro Belgium and Ferro Japan
exclusively related to the Fine Chemicals Business.






	2.5	 	Retained Liabilities. Neither Novolyte nor any of its Affiliates shall assume or become
liable to pay, perform or discharge any liability or obligation whatsoever of Ferro, Ferro
Japan, Ferro Suzhou, Ferro Belgium, or any of their respective Affiliates, whether or not
relating to any of the Acquired Assets or the Fine Chemicals Business, whether known or
unknown, fixed or contingent, accrued or unaccrued, except for and to the extent those
liabilities and obligations are expressly included in the definition of Assumed Liabilities.
All liabilities and other obligations of Ferro, Ferro Belgium, Ferro Japan, Ferro Suzhou,
and/or their respective Affiliates other than the Assumed Liabilities, including the
liabilities and obligations described in this Section 2.5, are referred to herein as the
“Retained Liabilities.” In furtherance and not in limitation of the foregoing, except for the
Assumed Liabilities, Novolyte expressly is not assuming any of the following liabilities or
obligations, whether accrued or fixed, absolute or contingent, known or unknown, determined or
determinable, and whenever or wherever arising, including, without limitation:






	 	(A)	 	All indebtedness, including all bank loans and other
indebtedness for borrowed money, all guarantees and similar obligations, all
obligations secured by liens, all capital leases and all obligations incurred
for all or any part of the purchase price of property or other assets;






	 	(B)	 	All claims, liabilities and obligations of Ferro or any
predecessor(s) or Affiliate(s) of Ferro resulting from, caused by, arising out
of, or relating to, directly or indirectly the ownership or operation of any
business other than the Fine Chemicals Business;






	 	(C)	 	Except for the Assumed Liabilities, all claims, liabilities and
obligations of Ferro or Ferro Suzhou, any predecessor(s) or Affiliate(s) of
Ferro or Ferro Suzhou resulting from, caused by, arising out of, or relating
to, directly or indirectly, the ownership or operation of the Fine Chemicals
Business prior to the Closing;






	 	(D)	 	All liabilities and obligations arising out of, relating to, or
resulting from any claims or actions, whether founded upon negligence, breach
of warranty, strict liability in tort, and/or other similar legal theory,
seeking compensation or recovery for injury to person or damage to property
alleged to have been caused by a Product sold by Ferro or its Affiliates
(including Ferro Suzhou) before the Closing;






	 	(E)	 	Ferro’s Employee Obligations (as defined in Section 8.1);






	 	(F)	 	All liabilities and obligations (including fines and penalties,
costs and expenses) relating to the Identified Environmental Matters and
Ferro’s Environmental Obligations (as defined in Section 8.2);






	 	(G)	 	Costs and expenses for which Ferro is responsible under Section
12.2;






	 	(H)	 	All liabilities, undertakings, and obligations, whether or not
arising primarily out of the conduct of the Fine Chemicals Business, which are
identified as Retained Liabilities on Appendix D (the failure to list any
liability, undertaking or obligation on Appendix D shall not create an Assumed
Liability or any other liability on the part of Novolyte or any of its
Affiliates);






	 	(I)	 	All liabilities and obligations of Ferro Belgium and Ferro
Japan not specifically described in Section 2.4(H);






	 	(J)	 	All claims, liabilities and obligations that relate to or
involve any of the Retained Assets;






	 	(K)	 	All liabilities and other obligations under the Acquired
Contracts, Acquired Leases, Acquired Licenses, and Acquired Permits with
respect to the period prior to Closing, whether known or unknown at the Closing
(other than the Assumed Liabilities);






	 	(L)	 	All liabilities and other obligations under the Contracts,
Leases, Licenses, and Permits that arise after the Closing but which arise out
of or relate to any breach that occurred before the Closing;






	 	(M)	 	Except for the Acquired Contracts, Acquired Leases, Acquired
Licenses, and Acquired Permits assumed hereunder and the Contracts, Leases,
Licenses and Permits of Ferro Suzhou, all other liabilities and indebtedness
under Contracts, Leases, Licenses, Permits, mortgages, indentures and other
instruments of Ferro and/or its Affiliates;






	 	(N)	 	All liabilities and obligations of Ferro to its stockholders or
other equity interest holders;






	 	(O)	 	All liabilities and obligations of the Fine Chemicals Business
in respect of any amounts owed to Ferro or any of its Affiliates;






	 	(P)	 	All liabilities and obligations to indemnify, reimburse or
advance amounts to any officer, director, employee or agent of Ferro or its
Affiliates;






	 	(Q)	 	All liabilities in respect of any proceeding, action, claim or
investigation at law or in equity commenced or with respect to the period prior
to the Closing Date in connection with the Fine Chemicals Business;






	 	(R)	 	Except as otherwise set forth in Article 8 hereof, all
liabilities and obligations arising out of or resulting from non-compliance
with any law, ordinance, regulation, injunction or treaty by Ferro or its
Affiliates;






	 	(S)	 	All Pre-Closing Tax Liabilities; and






	 	(T)	 	All Taxes relating to or in connection with the Split-Off
Transaction or the Suzhou Equity Transfer.






The disclosure of any liability or obligation on any Appendix or Schedule to this Purchase
Agreement will not, in and of itself, act to render any liability, obligation, or
commitment an Assumed Liability, except where such disclosed liability or obligation has
been expressly assumed by Novolyte as an Assumed Liability in accordance with the
provisions of Section 2.4 above.




	2.6	 	Purchase Price. For purposes of this Purchase Agreement, the term “Purchase Price” means –






	 	(A)	 	Fifty Six Million Dollars ($56,000,000) (the “Closing Purchase
Price”), plus






	 	(B)	 	Ten Million Dollars ($10,000,000) (the “Suzhou Equity Interest
Purchase Price”), representing the purchase price for the Suzhou Equity
Interest, plus or minus






	 	(C)	 	The amount of the adjustment determined in accordance with
Section 2.7 (the “Adjustment”).






	2.7	 	Adjustment. The Adjustment will be determined as follows and will apply to the portion of
the Fine Chemicals Business operated in and from the Suzhou Location, the Baton Rouge
Location, the Japan Location, the Walton Hills Location, the Posnick Location, the Walton
Hills Location and Louvain La Neuve, Belgium (the “Adjustment Operations”):






	 	(A)	 	Closing Adjustments.






	 	(1)	 	Closing Date Certificate. At least five business days before
the Closing Date, Ferro will deliver to Novolyte a certificate (the “Closing
Date Certificate”) setting forth Ferro’s good faith estimate of the Working
Capital of the Adjustment Operations as of the Closing Date (the “Estimated
Working Capital”), together with a copy of a good faith estimated unaudited
balance sheet of the Adjustment Operations as of the Closing Date (the “Closing
Date Balance Sheet”), upon which the computation of the Estimated Working
Capital will be based. The statement of Estimated Working Capital set forth in
the Closing Date Certificate will be in the same form as that used for the
calculation of the working capital statement (the “Working Capital Collar
Statement”) set forth on Appendix E and will be prepared in accordance with
Appendix F (the “Accounting Principles”). Notwithstanding anything in this
Agreement to the contrary, Estimated Working Capital will be reduced for any
Pre-Closing Tax Liabilities included in Assumed Liabilities.






	 	(2)	 	No Notice of Objection. If, within four business days after
Novolyte receives the Closing Date Certificate and the Closing Date Balance
Sheet, Novolyte has not given Ferro notice of its objection to the Estimated
Working Capital, then the Closing Purchase Price will be increased by the
amount, if any, that Estimated Working Capital exceeds the Working Capital Top
Collar, or decreased by the amount, if any, that the Working Capital Bottom
Collar exceeds the Estimated Working Capital (the “Estimated Working Capital
Adjustment”).






	 	(3)	 	Notice of Objection. If, within four business days after
Novolyte receives the Closing Date Certificate and the Closing Date Balance
Sheet, Novolyte gives notice of objection pursuant to this Section 2.7(A)(3,
then there will be no Estimated Working Capital Adjustment, the Closing
Purchase Price will remain fixed and the parties agree that all Adjustments
will be made on a post-Closing basis pursuant to the provisions of Section
2.7(B) hereof.






	 	(B)	 	Post Closing Adjustments.






	 	(1)	 	Closing Statement. Within 75 days after the Closing Date,
Novolyte will cause to have prepared and delivered to Ferro a statement (the
“Closing Statement”) that will set forth an itemized calculation of Working
Capital of the Adjustment Operations as of the Closing Date (the “Closing
Working Capital”). The Closing Statement will be in the same form as that used
for the calculation of the Working Capital Collar Statement set forth on
Appendix E and will be prepared in accordance with the Accounting Principles
set forth on Appendix F. Notwithstanding anything in this Agreement to the
contrary, Closing Working Capital will be reduced for any Pre-Closing Tax
Liabilities.






	 	(2)	 	Ferro’s Review. Upon receipt of the Closing Statement, Ferro
will immediately conduct a review of the Working Capital Statement and, within
30 days after receipt of the Working Capital Statement, either:






Acceptance by Ferro. Accept the Working Capital Statement in its
entirety, in which case the Working Capital of the Adjustment
Operations at and as of the Closing will be deemed to be as set forth
on the Working Capital Statement, or




Dispute by Ferro. Deliver to Novolyte a written notice and a
detailed written explanation of those items in the Working Capital
Statement that Ferro disputes, in which case the items of Working
Capital not affected by the disputed items will be deemed to be as
set forth on the Working Capital Statement and the items identified
by Ferro shall be deemed to be in dispute.




If Ferro fails to timely deliver a written objection notice pursuant to
Section 2.7(B)(2)(b), then Ferro shall be bound by the Working Capital
Statement.




	 	(3)	 	Informal Negotiations. If Ferro delivers a written objection
notice under Section 2.7(B)(2)(b) above, then during the 30-day period
following the delivery of such notice the parties will cause their
representatives to meet and seek to resolve the disputed items cordially
through informal negotiations and each of Novolyte and Ferro shall be
responsible for their costs and expenses related thereto.






	 	(4)	 	Dispute Resolution. If representatives of the parties are
unable to resolve disputed items through the informal negotiations described in
Section 2.7(B)(3) above, then at the end of the 30-day period described in
Section 2.7(B)(3), the parties will refer the unresolved disputed items for
final binding resolution to a mutually agreed internationally-recognized firm
of independent certified public accountants (other than Ernst & Young, Deloitte
& Touche LLP, KPMG LLP or Crowe Horwath LLP). The parties will request such
firm of accountants to review and resolve the disputed items in a written
report in accordance with the Accounting Principles, on a basis consistently
applied, within 30 days of such reference. In resolving any disputed item, the
accounting firm (i) will be bound by the provisions of this Section 2.7 and the
definitions pertaining hereto, (ii) may not assign a value to any item greater
than the highest value claimed for such item or less than the lowest value for
such item claimed by either Ferro or Novolyte, (iii) shall restrict its
decision to such items which are then in dispute and (iv) may review only the
written presentations of Ferro and Novolyte in resolving any matter which is in
dispute. The resolution of the disputed items by such firm will be binding on
Ferro and Novolyte, will be neither appealable nor contestable by Ferro or
Novolyte, and will not be subject to collateral attack by Ferro or Novolyte for
any reason. The costs of such firm will be paid one-half by Novolyte and
one-half by Ferro.






	 	(5)	 	Working Capital Collar. The “Working Capital Bottom Collar”
will be an amount equal to Fifteen Million Two Hundred Thousand Dollars
($15,200,000) and the “Working Capital Top Collar” will be an amount equal to
Sixteen Million Dollars ($16,000,000), which amount was calculated in the
manner set forth on Appendix E.






	 	(6)	 	Closing Working Capital. The final and conclusive “Closing
Working Capital” will be an amount equal to the Working Capital at and as of
the Closing as determined under this Section 2.7(B) above.






	 	(7)	 	Amount of Adjustment. The final Adjustment will be calculated
as follows:






(a) If the Estimated Working Capital is above the Working Capital Top
Collar and:




(1) The Closing Working Capital is more than the Estimated
Working Capital, then Novolyte will pay Ferro an amount in
cash equal to the Closing Working Capital minus the
Estimated Working Capital;




(2) The Closing Working Capital is less than the Estimated
Working Capital, but above the Working Capital Top Collar,
then Ferro will pay Novolyte an amount in cash equal to the
Estimated Working Capital minus Closing Working
Capital;




(3) The Closing Working Capital is within the Collar, then
Ferro will pay Novolyte an amount in cash equal to the
Estimated Working Capital minus the Working Capital
Top Collar; or




(4) The Closing Working Capital is less than the Working
Capital Bottom Collar, then Ferro will pay Novolyte an amount
in cash equal to the Estimated Working Capital minus
the Working Capital Top Collar plus the Working
Capital Bottom Collar minus the Closing Working
Capital; or




(b) If the Estimated Working Capital is within the Collar and:




(1) The Closing Working Capital is more than the Working
Capital Top Collar, then Novolyte will pay Ferro an amount in
cash equal to the Closing Working Capital minus the
Working Capital Top Collar;




(2) The Closing Working Capital is within the Collar, then
the Adjustment will be zero; or




(3) The Closing Working Capital is less than the Working
Capital Bottom Collar, then Ferro will pay Novolyte an amount
in cash equal to the Working Capital Bottom Collar
minus the Closing Working Capital; or




(c) If the Estimated Working Capital is below the Working Capital
Bottom Collar and:




(1) The Closing Working Capital is more than the Estimated
Working Capital, but below the Working Capital Bottom Collar,
then Novolyte will pay Ferro an amount in cash equal to the
Closing Working Capital minus the Estimated Working
Capital;




(2) The Closing Working Capital is more than the Estimated
Working Capital but within the Collar, then Novolyte will pay
Ferro an amount in cash equal to the Working Capital Bottom
Collar minus the Estimated Working Capital;




(3) The Closing Working Capital is more than the Estimated
Working Capital and more than the Working Capital Top Collar,
then Novolyte will pay Ferro an amount in cash equal to the
Working Capital Bottom Collar minus the Estimated
Working Capital plus the Closing Working Capital
minus the Working Capital Top Collar; or




(4) The Closing Working Capital is below the Estimated
Working Capital, then Ferro will pay Novolyte an amount in
cash equal to the Estimated Working Capital minus the
Closing Working Capital.




The Purchase Price will be determined on the date the amount of the
Adjustment is finally determined.




	2.8	 	Payment of Purchase Price. Novolyte will pay the Purchase Price as follows:






	 	(A)	 	Payment at Closing. At the Closing, Novolyte will






	 	(1)	 	Pay Ferro the Closing Purchase Price, and






	 	(2)	 	Pay U.S. Bank, National Association (the “Escrow Agent”) the
Suzhou Equity Interest Purchase Price, which will be held pursuant to the terms
of the Escrow Agreement attached hereto as Appendix G (the “Escrow Agreement”);
and






	 	(B)	 	Final Payment. Ferro or Novolyte (as the case may be) will pay
the Adjustment, if any, calculated in accordance with Section 2.7(B)(7),
together with interest thereon at the Prescribed Rate for the period of time
from the Closing Date through and including the date on which the Adjustment is
paid, within 10 business days after the final determination of the Purchase
Price.






(Payments of further adjustments pursuant to this Agreement will be made as provided
herein.)




	2.9	 	Method of Payment. All payments under this Purchase Agreement shall be made by delivery to
the payee as follows:






	 	(A)	 	Directed Payments. If a party which is entitled to a payment under this
Purchase Agreement provides the other party five days’ advance written designation of a
bank and account number into which the payee wishes payment to be made, then the payer
will make such payment by wire transfer (in immediately available funds) to the
designated account of the payee.






	 	(B)	 	Other Payments. In all other cases, the party obligated to make a payment
under this Purchase Agreement will do so by delivering to the payee a bank cashier’s
check (in immediately available funds) payable to the order of the payee.






	2.10	 	Allocation of Consideration. Novolyte and Ferro will work in good faith to agree to an
allocation of the Purchase Price and Assumed Liabilities among the Acquired Assets within 90
days following the date on which the Closing Working Capital Statement is finally determined
in accordance with Section 2.7(b). If Novolyte and Ferro agree on an allocation they will be
bound to such allocation for all federal, state, local and foreign income tax purposes unless
and until there is a “final determination” to the contrary, within the meaning of Section
1313(a) of the Code. However, if agreement among Novolyte and Ferro is not reached as to the
appropriate allocation, each of Novolyte and Ferro may use its own allocation.





Article 3 — - Actions Before Closing




	3.1	 	Access to Records. From today until the Closing, Ferro will cause the Fine Chemicals
Business to afford duly authorized representatives of Novolyte (including its lenders) access
during normal business hours, and without unreasonable interruption of the Fine Chemicals
Business, to all of the assets, properties, books, and nonprivileged records of the Fine
Chemicals Business and will permit such representatives to make abstracts from, or take copies
of, such books, records, or other documentation, or to obtain temporary possession of any
thereof as may be reasonably required by Novolyte. During such period, Ferro will furnish to
Novolyte such information concerning the Fine Chemicals Business, and its assets, liabilities,
or condition as Novolyte or its representatives (including its lenders) may reasonably
request. Notwithstanding the foregoing, however, Ferro will not be obligated to disclose or
make available to Novolyte any information concerning the Fine Chemicals Business that, in the
opinion of Ferro’s counsel, should not be disclosed to Novolyte as a matter of law. No
investigation or inspection by Novolyte shall in any way affect or diminish any of the
representations or warranties made by Ferro in this Purchase Agreement or the conditions to
the obligations of Ferro to consummate the transactions contemplated by this Purchase
Agreement; provided that (i) if the investigation or inspection by Novolyte causes Ferro to
breach a representation or warranty then Ferro shall be relieved of its indemnity obligations
under Article 9 to the extent the loss in respect of any such indemnity claim was caused by
such investigation or inspection by Novolyte, and (ii) if the investigation or inspection by
Novolyte causes a closing condition under Article 4 not to be satisfied then such condition
shall be deemed satisfied to the extent of the consequence of any such investigation or
inspection by Novolyte.






	3.2	 	Interim Conduct of the Fine Chemicals Business. From today until the Closing, Ferro will
conduct the Fine Chemicals Business only in the ordinary and usual course, subject to
Novolyte’s approval of certain transactions pursuant to Section 3.3. Without limiting the
generality of the foregoing but specifically excluding actions related to the Split-Off
Transaction and related to the buy-back of Trade Accounts Receivable by Ferro pursuant to the
terms of agreements set forth in Part I of the Disclosure Schedule, insofar as the Fine
Chemicals Business is concerned, Ferro will use its reasonable efforts to:






	 	(A)	 	Preserve substantially intact the Fine Chemicals Business’
material relationships with suppliers, customers, employees, creditors, and
others having business dealings with the Fine Chemicals Business;






	 	(B)	 	Maintain in full force and effect its existing policies of
insurance which materially affect the Fine Chemicals Business;






	 	(C)	 	Prepare and file in the ordinary course of business and in
accordance with prior custom and practice all Tax Returns exclusively related
to the Fine Chemicals Business that are required to be filed before the Closing
Date; provided that Ferro will promptly deliver to Novolyte duplicate copies of
such Tax Returns to Novolyte;






	 	(D)	 	Continue performance in the ordinary course of its obligations
under contracts, commitments, or other obligations to be included as part of
the Fine Chemicals Business; and






	 	(E)	 	Purchase Inventory, collect Trade Accounts Receivable and pay
Trade Accounts Payable consistent with historical practice and in the ordinary
and usual course of business.






	3.3	 	Novolyte’s Approval of Certain Transactions. Except as may otherwise be required under this
Purchase Agreement and except with regard to any actions related to the Split-Off Transaction
or with regard to the buy-back of Trade Accounts Receivable by Ferro pursuant to the terms of
agreements set forth in Part I of the Disclosure Schedules, from today until the Closing,
insofar as the Fine Chemicals Business is concerned, Ferro will not do any of the following
(or permit Ferro Suzhou to do any of the following) without the prior approval with written
confirmation of Novolyte, which approval may not be unreasonably withheld:






	 	(A)	 	Incur or permit the incurrence of any indebtedness for borrowed
money;






	 	(B)	 	Purchase or dispose of any Real Property or interests in Real
Property or create or permit the creation of any Encumbrances against the Real
Property other than Permitted Encumbrances;






	 	(C)	 	Enter into or amend any Lease involving a term of more than one
year or rental obligation exceeding $100,000 per annum in any single case;






	 	(D)	 	Voluntarily permit any Encumbrances to be incurred on material
assets of the Fine Chemicals Business except in the ordinary course of
business;






	 	(E)	 	Except for normal merit, promotional, or cost of living
increases in accordance with Ferro’s past practices or any change required by
applicable law, increase the rate of compensation or bonuses for any of the
employees or consultants of the Fine Chemicals Business or otherwise enter into
or alter any employment, consulting, or managerial services agreement primarily
affecting the Fine Chemicals Business;






	 	(F)	 	Adopt, commence, enter into, amend or alter any Employee
Benefit Plan or Foreign Plan in which employees of the Fine Chemicals Business
participate or are, or would be, eligible to participate, except to the extent
required by law;






	 	(G)	 	Make any single new commitment or increase any single previous
commitment for capital expenditures for the Fine Chemicals Business in an
amount exceeding $100,000 or $250,000 individually or in the aggregate among
all such commitments;






	 	(H)	 	Accelerate or delay the sale of any material amount of Products
or delay the purchase of raw materials except as may be necessary in the
ordinary course of business consistent with historical practice;






	 	(I)	 	Sell, assign, transfer, license, or convey any of the
Intellectual Property to be included as part of the Fine Chemicals Business;






	 	(J)	 	Enter into or amend any Contract (other than purchase orders)
or License that has a term of more than one year or that involves payment by
the Fine Chemicals Business of in excess of $100,000;






	 	(K)	 	Solely to the extent it impacts the Fine Chemicals Business,
make or change any Tax election, change an annual accounting period, adopt or
change any accounting method, file any amended Tax Return, enter into any
closing agreement, settle any Tax claim or assessment, surrender any right to
claim a refund of Taxes, consent to any extension or waiver of the limitation
period applicable to any Tax claim or assessment, or take any other similar
action relating to the filing of any Tax Return or the payment of any Tax;






	 	(L)	 	Hire any employee whose base salary exceeds $100,000 per year
or otherwise outside the ordinary course of business; or






	 	(M)	 	Enter into or amend any Contract, Lease, License or other
agreement or arrangement with any Affiliate.






Ferro will give Novolyte notice of any Violations of which Ferro or Ferro Suzhou obtain
notice or knowledge between today and the Closing.




	3.4	 	Negotiation of Other Agreements. From today until the Closing and except to the extent any
such agreements or terms are attached to this Agreement as an Appendix, the parties will
negotiate in good faith such other and further agreements as they may deem appropriate or
necessary for the orderly transfer of the Fine Chemicals Business from Ferro to Novolyte,
including the agreements listed on Appendix I, and including Ferro causing Ferro Belgium and
Ferro Japan to enter into such transfer agreements with Novolyte as are necessary to transfer
and assign the applicable Acquired Assets of such Affiliates to Novolyte. (Such agreements,
the agreements and terms attached to this Agreement as Appendixes and any other agreements
into which the parties enter in connection with the transactions contemplated by this Purchase
Agreement, are collectively referred to as the “Other Agreements.”)






	3.5	 	Consents. From today until the Closing, Ferro shall use its reasonable efforts to obtain the
consents or approvals (or effective waivers thereof) of all persons whose consents or
approvals are required for the disclosure and assignment of Ferro’s rights under the Acquired
Contracts, Acquired Leases, Acquired Licenses, Acquired Permits, Acquired Trade Account
Receivables and other similar items, including without limitation, related to the buy-back of
Trade Accounts Receivable by Ferro pursuant to the terms of the agreements set forth in Part I
of the Disclosure Schedule. Failure of the parties to obtain the consents or approvals
described in this Section 3.5 shall not be deemed to be a breach of this Purchase Agreement
and shall not give rise to monetary damages against either party.






	3.6	 	Coordination of Public Announcements. From today until the Closing, no party will make any
public announcement concerning the transactions contemplated by this Purchase Agreement
without having previously consulted with and having received the consent of the other parties,
such consent not to be withheld unreasonably. Nothing in the preceding sentence, however,
will prevent any party from making any announcement required by law, by the rules of any
securities exchange, or by any listing agreement with a securities exchange to which such
party is a party or by which it is bound. Except as stated in the foregoing sentence, the
parties will cooperate in the planning, preparation, and issuance of any and all public
announcements concerning this Purchase Agreement and the transactions contemplated by this
Purchase Agreement.






	3.7	 	Regulatory Approvals. Immediately after the execution and delivery of this Purchase
Agreement, the parties will promptly proceed with the preparation and filings, as applicable,
of any required filings necessary in order to obtain the approval or authorization of those
governmental agencies or instrumentalities whose approval or authorization is necessary in
order to consummate the transactions contemplated by this Purchase Agreement, including the
following:






	 	(A)	 	All required notifications and filings with the Suzhou
Industrial Park Economic and Trade Development Bureau (“SIP Commerce
Authority”) and the Suzhou Industrial Park Administration of Industry and
Commerce (“SIP AIC”) related to the Suzhou Equity Transfer, provided that the
exact timing of the filings and actions with regard to the SIP Commerce
Authority, SIP AIC and other governmental authorities in the P.R.C. will be
determined by Ferro and Novolyte and after the execution and delivery of the
Suzhou Equity Transfer Agreement;






	 	(B)	 	Any required notification to, filing with or approval by the
P.R.C. Ministry of Commerce in accordance with relevant P.R.C antitrust laws
and regulations, if applicable; and






	 	(C)	 	Any required notification to the U.S. Federal Trade Commission
under Title II of the Hart Scott Rodino Antitrust Improvements Act, as amended
(the “HSR Act”), and the rules of the Federal Trade Commission thereunder (the
“Regulations”).






If any of the foregoing governmental authorities require, as a condition to granting any
such approval or authorization, or as a condition to not issuing a request for additional
information or not commencing a second phase investigation of the transactions contemplated
by this Purchase Agreement, that Novolyte agrees to hold separate and/or dispose after
purchase of any of the Acquired Assets or all or any part of the Fine Chemicals Business or
to take any other action related to its business and its assets as of the date hereof, so
as to prevent or ameliorate any actual or perceived anti-competitive consequences of the
transactions contemplated by this Purchase Agreement, then Novolyte will have the right to
terminate this Purchase Agreement by delivery of written notice to Ferro, in which case the
parties shall be released from all liabilities and obligations to one another hereunder
except for any that are stated to survive termination. If Novolyte acquires a business
between the date of this Agreement and the Closing Date, and as a result of any such
acquisition the transactions contemplated by this Agreement are not approved by the
relevant governmental authority under the HSR Act and as a result the transactions
contemplated by this Agreement do not close, then Novolyte will reimburse Ferro for its
out-of-pocket legal and accounting fees incurred solely in connection with the transactions
contemplated by this Purchase Agreement up to an aggregate maximum amount of $250,000.




The parties will promptly inform each other of any material communication from the U.S.
Federal Trade Commission (the “FTC”), the United States Department of Justice (the “DOJ”)
or any other U.S. or foreign government authority regarding any of the transactions
contemplated hereby. If a party or its Affiliate receives a request for additional
information or documentary material from any such government authority with respect to the
transactions contemplated by this Purchase Agreement, then such party will endeavor in good
faith to make, or cause to be made, as soon as reasonably practicable and after
consultation with the other party, an appropriate response in compliance with such request.
Ferro will advise Novolyte promptly in respect of any understandings, undertakings, or
agreements (oral or written) that Ferro proposes to make or enter into with the FTC, the
DOJ, or any other U.S. or foreign government authority in connection with the transactions
contemplated by this Purchase Agreement. Novolyte will advise Ferro promptly in respect of
any understandings, undertakings, or agreements (oral or written) that Novolyte proposes to
make or enter into with the FTC, the DOJ, or any other U.S. or foreign government authority
in connection with the transactions contemplated hereby. If any objections are asserted
with respect to the transactions contemplated by this Purchase Agreement by the FTC, the
DOJ, or any other U.S. or foreign government authority or if any suit is instituted by any
U.S. or foreign government authority or any private party challenging any of the
transactions contemplated by this Purchase Agreement as violative of any competition or
antitrust law, subject to the preceding paragraph the parties will each use commercially
reasonable efforts to resolve such objections or challenge as such government authority or
private party may have to such transactions, including to vacate, lift, reverse or overturn
any order, decree or ruling or statute, rule, regulation or executive order, whether
temporary, preliminary or permanent, so as to permit consummation of the transactions
contemplated by this Agreement.




Ferro and Novolyte will cooperate and use reasonable best efforts to transfer, amend or
obtain, as the case may be, all Permits required to be in effect for Novolyte and its
Affiliates in connection with the operation of the Fine Chemicals Business. Ferro and
Novolyte, as the case may be, shall submit to appropriate governmental authorities all
applications, permit transfer agreements, notices and other documents in form and substance
necessary to transfer, amend or reissue all such Permits to Novolyte or its Affiliates.




	3.8	 	Novolyte’s Financing. From today until the Closing, Novolyte will use commercially
reasonable efforts (but without requirement of instituting any litigation) to implement
Novolyte’s Financing Plan (as defined in Section 7.3(G) below) in order to be able to make the
payment required under Section 2.8(A) above on the Closing Date. Without limiting the
generality of the foregoing, Novolyte will –






	 	(A)	 	Provide Ferro on a current and updated basis such reports as to
Novolyte’s progress toward implementing Novolyte’s Financing Plan, including
without limitation copies of any commitment letters, as Ferro may from time to
time reasonably request;






	 	(B)	 	Promptly notify Ferro of any material change in Novolyte’s
Financing Plan; and






	 	(C)	 	Promptly notify Ferro if and when Novolyte determines that
there is a material risk that Novolyte’s Financing Plan cannot or will not be
implemented or otherwise that Novolyte will not have sufficient cash funds to
make the payment required under Section 2.8(A) above.






	3.9	 	Exclusivity. Between today and the earlier to occur of the Closing Date or the date on which
this Agreement is terminated, neither Ferro nor Ferro Suzhou will, nor will they permit any of
their respective officers, directors, Affiliates, agents or representatives to, directly or
indirectly,






	 	(A)	 	Solicit, initiate or encourage inquiries or proposals or
conduct or engage in any discussions or negotiations to enter into any
agreement or understanding, with any other person or entity relating to a
merger, business combination, recapitalization or similar corporate event
involving the Fine Chemicals Business or relating to the sale of any of the
capital stock of Ferro or the registered capital of Ferro Suzhou or any
material portion of the assets of the Fine Chemicals Business, or






	 	(B)	 	Disclose any nonpublic information relating to Ferro or Ferro
Suzhou or afford access to the properties or the books and records of Ferro or
Ferro Suzhou, to any other person or entity that may be considering any such
transaction.






Ferro will promptly (and in any event within 24 hours) notify Novolyte of its receipt of
any written inquiries or proposals regarding any such transaction.




	3.10	 	Contact with Certain Employees. From today until the Closing, Ferro will cause the Fine
Chemicals Business to afford duly authorized representatives of Novolyte access during normal
business hours, and without unreasonable interruption of the Fine Chemicals Business, to those
employees of the Fine Chemicals Business as have been mutually agreed upon by the parties or
as may be reasonably requested by Novolyte, for purposes of negotiating and entering into
employment and non-compete agreements.






	3.11	 	Contact with Customers. From today until the Closing, Ferro will cause the Fine Chemicals
Business to afford duly authorized representatives of Novolyte (including Novolyte’s
lender(s)) access during normal business hours, and without unreasonable interruption of the
Fine Chemicals Business, to the Top Ten Customers of the Fine Chemicals Business as reasonably
requested by Novolyte for purposes of conducting customer due diligence; provided, however,
that Novolyte will make no contact with any customer of the Fine Chemicals Business, including
the Top Ten Customers, unless a representative of Ferro is present at any such meeting or on
any such call and unless such meeting or call is initially based on a script to be reasonably
agreed upon by Ferro and Novolyte.






	3.12	 	Contact with Suppliers. From today until the Closing, Ferro will cause the Fine Chemicals
Business to afford duly authorized representatives of Novolyte (including Novolyte’s
lender(s)) access during normal business hours, and without unreasonable interruption of the
Fine Chemicals Business, to the Top Ten Suppliers of the Fine Chemicals Business as reasonably
requested by Novolyte for purposes of conducting supplier due diligence; provided, however,
that Novolyte will make no contact with any supplier of the Fine Chemicals Business, including
the Top Ten Suppliers, unless a representative of Ferro is present at any such meeting or on
any such call and unless such meeting or call is initially based on a script to be reasonably
agreed upon by Ferro and Novolyte.





Article 4 — - Conditions




	4.1	 	Conditions to Novolyte’s Obligations. The obligation of Novolyte to consummate the
transactions contemplated by this Purchase Agreement is subject to the satisfaction of the
following conditions at or before the Closing:






	 	(A)	 	The representations and warranties of Ferro contained in
Section 7.1 of this Purchase Agreement shall be true, accurate, and complete in
all material respects as of today and as of the Closing (except with respect to
the effect of transactions contemplated or permitted by this Purchase
Agreement);






	 	(B)	 	The representations and warranties of Ferro contained in
Section 7.2 of this Purchase Agreement shall be true, accurate, and complete in
all material respects as of today and as of the Closing (except with respect to
the effect of transactions contemplated or permitted by this Purchase Agreement
and matters reflected in updates to the Disclosure Schedules as provided in
Section 8.4 (i) with regard to all pre-signing breaches, if such matters
reflect a condition or circumstance that would give rise to damages to Novolyte
which do not exceed One Million Dollars ($1,000,000) in the aggregate, and (ii)
with regard to post-signing breaches, if such matters reflect conditions or
circumstances that would not result in a material and adverse effect on the
Fine Chemicals Business Condition);






	 	(C)	 	Ferro shall have performed and complied with all material
undertakings required by this Purchase Agreement to be performed or satisfied
by Ferro before the Closing;






	 	(D)	 	Ferro shall have taken all corporate and other proceedings or
actions necessary to be taken by Ferro for consummation of the transactions
contemplated by this Purchase Agreement;






	 	(E)	 	Ferro shall have delivered the documents listed in Appendix J,
duly executed by the appropriate parties thereto (other than Novolyte);






	 	(F)	 	The parties shall have received all regulatory approvals
mentioned in Section 3.7(C) above and all waiting periods (and any extension
thereof) applicable to the transactions contemplated by this Agreement under
the HSR Act, shall have terminated or expired;






	 	(G)	 	There shall not have been issued and in effect any injunction
or similar legal order prohibiting or restraining or any action by any
governmental authority seeking to enjoin the consummation of any of the
transactions contemplated in this Purchase Agreement;






	 	(H)	 	Ferro shall have caused Ferro Belgium and Ferro Japan to
execute and deliver to Novolyte such documents as are necessary to transfer and
assign the applicable Acquired Assets of such entities to Novolyte;






	 	(I)	 	Novolyte shall have obtained senior debt financing for the
transactions contemplated by this Purchase Agreement;






	 	(J)	 	Novolyte’s due diligence with respect to Ferro Suzhou shall not
disclose any matter(s) which is reasonably likely to have a material adverse
effect on the ability of Novolyte to operate the Fine Chemicals Business, as
currently conducted by Ferro Suzhou, from and after the Suzhou Equity Closing;






	 	(K)	 	Following Novolyte’s review of contracts and diligence calls
with eight (8) of the Top Ten Customers and eight (8) of the Top Ten Suppliers,
no matter shall have been disclosed which would be reasonably likely to have a
material adverse effect on the Fine Chemicals Business Condition; provided,
however, for purposes of making this determination, price and terms shall not
be considered;






	 	(L)	 	All consents, authorizations, approvals and waivers from third
parties and governmental authorities and other parties set forth on Appendix Y
hereto shall have been obtained, shall be in form and substance reasonably
satisfactory to Novolyte, shall not be subject to the satisfaction of any
condition that has not been satisfied or waived and shall be in full force and
effect;






	 	(M)	 	Ferro shall have delivered to Novolyte certifications and such
other documents reasonably requested by Novolyte to the effect that Ferro is a
“United States person” for purposes of Sections 897 and 1445 of the Code and
that Novolyte is not otherwise obligated to withhold from any payment
hereunder;






	 	(N)	 	Ferro shall have received the certificate of approval and
business license from the SIP Commerce Authority and SIP AIC evidencing the
Split-Off Transaction; and






	 	(O)	 	The Title Company (defined hereinafter) shall be prepared to
close the conveyance of the Real Property in accordance with Section 5.5 of
this Purchase Agreement and the Title Company shall be prepared to issue and
deliver the Title Policies (defined hereinafter) as set forth in such section.






	4.2	 	Conditions to Ferro’s Obligations. The obligation of Ferro to consummate the transactions
contemplated by this Purchase Agreement is subject to the satisfaction of the following
conditions at or before the Closing:






	 	(A)	 	The representations and warranties of Novolyte contained in
Section 7.3 of this Purchase Agreement shall be true, accurate, and complete in
all material respects as of today and as of the Closing (except with respect to
the effect of transactions contemplated or permitted by this Purchase
Agreement);






	 	(B)	 	Novolyte shall have substantially performed and complied with
all material undertakings required by this Purchase Agreement to be performed
or satisfied by Novolyte before the Closing;






	 	(C)	 	Novolyte shall have taken all corporate and other proceedings
or actions necessary to be taken by Novolyte for consummation of the
transactions contemplated by this Purchase Agreement;






	 	(D)	 	Novolyte shall be prepared to deliver the documents listed in
Appendix K;






	 	(E)	 	If Novolyte has assigned its rights and delegated its duties
under this Purchase Agreement to an Affiliate as permitted under Section 12.4,
Novolyte Guarantee shall remain in full force and effect;






	 	(F)	 	The parties shall have received all regulatory approvals
mentioned in Section 3.7(C) and all waiting periods (and any extension thereof)
applicable to the transactions contemplated by this Agreement under the HST
Act, shall have terminated or expired; and






	 	(G)	 	There shall not have been issued and in effect any injunction
or similar legal order prohibiting or restraining the consummation of any of
the transactions contemplated in this Purchase Agreement.






	4.3	 	Parties’ Best Commercial Efforts. From today until the Closing, the parties will cooperate
and use their respective best commercial efforts to cause the conditions set forth in this
Article 4 over which they may respectively have influence or control to be satisfied as soon
as reasonably practicable.





Article 5 — - Closing




	5.1	 	The Closing. For purposes of this Purchase Agreement, the term “Closing” means the time at
which the transactions contemplated by this Purchase Agreement will be consummated after
satisfaction or written waiver of the conditions set forth in Article 4 of this Purchase
Agreement. At the Closing, the parties will execute and deliver the Suzhou Equity Transfer
Agreement and after the Closing Ferro will make the filings with the SIP Commerce Authority
and the SIP AIC and related actions required under Section 6.1 of this Agreement and the
applicable terms of the Suzhou Equity Transfer Agreement. The closing of the Suzhou Equity
Transfer (the “Suzhou Equity Closing”) will be carried out pursuant to the terms of the Suzhou
Equity Transfer Agreement.






	5.2	 	Date, Time, and Place of Closing. Subject to the satisfaction of the conditions set forth in
Article 4, the Closing will occur at 10:00 a.m. (Eastern Time) on October 31, 2008, or such
other date as the parties may agree in writing (the “Closing Date”). The Closing will take
place at the offices of Ferro at 1000 Lakeside Avenue, Cleveland, Ohio, or at such other place
as the parties may agree in writing. The Closing will be deemed to have occurred as of 11:59
p.m. on the Closing Date (the “Closing Time”) and the Closing Working Capital shall be
determined as of the Closing Time.






	5.3	 	Novolyte’s Obligations. At the Closing, Novolyte will deliver to Ferro the following:






	 	(A)	 	The documents, certificates, and other items referred to in
Appendix K;






	 	(B)	 	Such instruments as may be necessary or appropriate to reflect
Novolyte’s assumption of the Assumed Liabilities effective as of the Closing;
and






	 	(C)	 	The amount specified in Section 2.6, as adjusted pursuant to
2.7(A).






	5.4	 	Ferro’s Obligations. At the Closing, Ferro will deliver to Novolyte the following:






	 	(A)	 	The documents, certificates, and other items referred to in
Appendix J;






	 	(B)	 	Other than the Suzhou Equity Interest which will be governed by
the terms of the Suzhou Equity Transfer Agreement, Ownership to and possession
of the Acquired Assets as contemplated in this Purchase Agreement;






	 	(C)	 	Such deeds, bills of sale, and such other instruments as may be
necessary or appropriate to reflect Ferro’s conveyance of the Acquired Assets
to Novolyte, it being understood that the Suzhou Equity Transfer will not occur
as of the Closing but rather pursuant to the terms of the Suzhou Equity
Transfer Agreement.






	5.5	 	U.S. Real Estate Conveyance. Ferro will convey the Real Property that is located in the
United States and included in the Acquired Assets as follows:






	 	(A)	 	Title Commitments, Title Policy and Surveys. Ferro has, at its sole cost and
expense, provided Novolyte with an ALTA title insurance commitment (the “Title
Commitment”) issued from Chicago Title Insurance Company dated April 21, 2008 as File
No. 08-0400 (the “Title Company”) committing to insure good and marketable fee simple
title to the Real Property located in the United States. Novolyte may, at its sole
cost and expense, obtain an update of the survey prepared by Bock & Clark National
Surveyors Network, through Collins & Associates Land Surveyors, Inc., dated May 30,
2006, as revised June 28, 2006 for the portion of the Real Property reflected thereon
(the “Existing Survey”) and certified to Novolyte (or its nominee) (the “Updated
Survey”). If Novolyte desires to have the Updated Survey cover more or different acres
of the Real Property then included in the Existing Survey, the cost thereof will also
be at Novolyte’s sole cost and expense. Novolyte shall use commercially reasonable
efforts to obtain promptly any Updated Survey which it determines is necessary or
desirable in connection with the consummation of the transactions contemplated by this
Agreement.






	 	(B)	 	Title Company. At Novolyte’s sole cost and expense, Novolyte may cause the
Title Company to issue to Novolyte (or its nominee) at and as a condition of the
Closing (and Ferro will take all reasonable actions and deliver all required
instruments to satisfy all requirements set forth in the Title Commitment to enable the
Title Company to issue) an ALTA form Owner’s Policy of Title Insurance (the “Title
Policy”) in an amount equal to the fair market value of the insured Real Property
located in the United States insuring fee simple title to such Real Property to be in
Novolyte (or its nominee), subject only to Permitted Encumbrances and the standard
pre-printed exceptions of the Title Company. Novolyte shall use commercially
reasonable efforts to obtain promptly any Title Policy which it determines is necessary
or desirable in connection with the consummation of the transactions contemplated by
this Agreement. With respect to the delivery of the Deed (defined hereinafter) and the
issuance and delivery of the Title Policy at Closing, the Closing will be performed as
a “New York” style closing such that the Title Company will insure title to the Real
Property located in the United States as set forth herein as of and upon release of the
Deed from the Title Company for recording upon the telephonic instructions to the Title
Company as set forth in Section 5.5(C) below.






	 	(C)	 	Deed. No later than two days before the Closing Date, Ferro will execute and
deliver to the Title Company a corporate warranty deed with special warranty covenants
in a form reasonably acceptable to the Title Company (the “Deed”) conveying and
warranting with special warranty covenants fee simple title to such Real Property to
Novolyte (or its nominee), subject only to the exceptions set forth on the Title
Commitment. The Existing Survey and the Updated Survey, if so obtained by Novolyte,
together with such affidavits, certifications, and other instruments as are ordinarily
delivered to a purchaser of real estate or filed in the public records of the community
where such Real Property is located and as may otherwise be reasonably required by the
Title Commitment and/or the Title Company in order for the Title Company to issue the
Title Policy at Closing as set forth in Section 5.5(A) above, including without
limitation, a gap, survey and possession affidavit in the form generally utilized by
the Title Company and reasonably acceptable to Ferro, a FIRPTA affidavit, and any other
recording forms reasonably necessary to effectuate the recording of the Deed
(collectively, the “Conveyance Instruments”).






	 	(D)	 	Instructions. At the time Ferro delivers the Deed to the Title Company, Ferro
and Novolyte will also deliver to the Title Company a joint letter instructing the
Title Company to hold the Deed until the Closing and, at the Closing,






	 	(1)	 	If, at Closing, the Title Company is then prepared to issue to
Novolyte the Title Policy, and upon joint telephonic instructions from Ferro
and Novolyte, to record the Deed in the appropriate public records, or






	 	(2)	 	Otherwise, to return the Deed to Ferro.






	 	(E)	 	Confirmation. If the Title Company is instructed to record the Deed, then the
Deed will be deemed to have been recorded as of the Closing Time and the Title Policy
will be deemed in effect and effective as of the date of such recording provided that
the Title Company has insured over any gap between the release of the Deed from the
Title Company and recording thereof.





Article 6 — - Actions After Closing




	6.1	 	Suzhou Equity Transfer and Local Formalities. Simultaneously with the Closing of this
Purchase Agreement, Novolyte and Ferro will execute and deliver the Suzhou Equity Transfer
Agreement, the Management and Transition Service Agreement, the Escrow Agreement, and such
other agreements and documents required under the Suzhou Equity Transfer Agreement to be
executed and delivered simultaneously therewith. The Suzhou Equity Transfer Agreement sets
forth the terms of the transfer of the Suzhou Equity Interest and the Management and
Transition Service Agreement sets forth the arrangements of Ferro and Novolyte whereby Ferro
will operate the Fine Chemicals Business in the P.R.C. until the Suzhou Equity Closing. The
Suzhou Equity Transfer Agreement is not intended to amend, supplement, or supersede this
Purchase Agreement or any of its terms or conditions. If any of the provisions of this
Purchase Agreement conflict with the terms and conditions of the Suzhou Equity Transfer
Agreement, then the terms and conditions of this Purchase Agreement, and not those of the
Suzhou Equity Transfer Agreement, shall govern. On the Suzhou Equity Closing, Ferro will
deliver a certificate from authorized directors and/or officers of Ferro confirming that all
of the representations and warranties related to Ferro Suzhou contained in Section 6.1 of the
Suzhou Equity Transfer Agreement and Sections 7.2 (A), (I), (M), (N), (O), (P), (Q) and (S) of
this Purchase Agreement continue to be true, accurate, and complete in all material respects
as of the date thereof, as though such representations and warranties had been made anew as of
the Suzhou Equity Closing except with respect to the effect of transactions contemplated or
permitted by this Purchase Agreement or the Suzhou Equity Transfer Agreement and matters
reflected in updates to the Disclosure Schedules as provided in Section 8.4(B): (i) with
regard to all pre-signing (of the Suzhou Equity Transfer Agreement) breaches, if such matters
reflect conditions or circumstances that would give rise to damages to Novolyte which do not
exceed Two Hundred Thousand Dollars ($200,000) in the aggregate, and (ii) with regard to
post-signing (of the Suzhou Equity Transfer Agreement) breaches, if such matters reflect
conditions or circumstances that would not result in a material and adverse effect on Ferro
Suzhou, it being confirmed by the parties that such certificate shall be subject to the
exception and exclusion contained in Section 5.4(A) of the Suzhou Equity Transfer Agreement.
Notwithstanding anything to the contrary contained in this Agreement or the Suzhou Equity
Transfer Agreement, Novolyte shall have no obligation to close the Suzhou Equity Transfer if
Ferro fails or is otherwise unable to deliver to Novolyte the certificate referenced in the
immediately preceding sentence. In the case of any supplement or amendment which constitutes
a pre-signing (of the Suzhou Equity Transfer Agreement) breach and the closing of the Suzhou
Equity Transfer occurs, Novolyte will not be deemed to have waived any right or claim pursuant
to the terms of this Agreement, including pursuant to Article 9, with respect to any
pre-signing (of the Suzhou Equity Transfer Agreement) breach that is disclosed pursuant to any
such supplement or amendment made by Ferro at or before the Suzhou Equity Closing.






	6.2	 	Further Conveyances. After the Closing, Ferro will, without further cost or expense to
Novolyte, execute and deliver to Novolyte (or cause the same be executed and delivered to
Novolyte), such additional instruments of conveyance, and Ferro will take such other and
further actions as Novolyte may reasonably request and which are ordinarily provided by a
seller, more completely to sell, transfer, and assign to Novolyte and vest in Novolyte
Ownership to the Acquired Assets.






	6.3	 	Further Consents. If and to the extent the parties fail to obtain before Closing the consent
or approval (or an effective waiver thereof) of any person or persons with respect to any item
described in Section 3.5, then after the Closing






	 	(A)	 	Until such consent or approval (or an effective waiver thereof)
has been obtained —






	 	(1)	 	On behalf of Ferro, Novolyte will perform all of Ferro’s duties
with respect to such item, other than any duty arising from any breach
occurring at or prior to the Closing,






	 	(2)	 	On behalf of Novolyte, Ferro will exercise all of Ferro’s
rights with respect to such item as directed by Novolyte; and






	 	(3)	 	Any such Contract, Lease, License or Permit shall not be deemed
an Acquired Contract, Acquired Lease, Acquired License or Acquired Permit, as
applicable, until any such consent, approval or waiver has been obtained.






	 	(B)	 	The parties will use reasonable efforts to obtain from such
person or persons the consents or approvals (or effective waivers thereof).






	 	(C)	 	If the parties are unable to obtain any such consent, approval,
or waiver, then






	 	(1)	 	This Purchase Agreement shall not constitute or be deemed to be
a contract to assign the same if an attempted assignment without such consent,
approval, or waiver would constitute a breach of such item or create in the
issuer or any party thereto the right or power to cancel or terminate such
item; and






	 	(2)	 	Ferro will cooperate with Novolyte in any reasonable
arrangement designed to provide Novolyte with the benefit of Ferro’s rights
under such item, including enforcement (at Novolyte’s expense) of any and all
rights of Ferro against such person as Novolyte may reasonably request.






In the use of its reasonable efforts under subsection (C) above, Ferro will not be
obligated to pay any additional consideration in order to obtain any consent, approval, or
waiver. Ferro will, however, cooperate with Novolyte in obtaining a reasonable and
economic solution with such person.




	6.4	 	Accounting Reports. Except with regard to the preparation and delivery of the Closing
Working Capital, the Closing Statement and the documentation related thereto, which shall be
prepared and delivered to Ferro at Novolyte’s cost, after the Closing, Novolyte will cause the
management of the Fine Chemicals Business to prepare and deliver to Ferro (at Ferro’s cost) –






	 	(A)	 	Year-end, quarterly, and/or monthly trial balances for the Fine
Chemicals Business, together with supporting detail, for periods on or before
the Closing Date normally provided by Ferro business units;






	 	(B)	 	Information needed in order to file statutory financial
statements and Tax Returns for Ferro in respect of periods on or before the
Closing Date; and






	 	(C)	 	Such other records and accounts as may reasonably be required
by Ferro in order to complete financial statements and reports relating to the
pre-Closing activities of the Fine Chemicals Business.






After the Closing, Novolyte will, at Ferro’s cost, also cause management of the Fine
Chemicals Business to afford Ferro internal and external auditors such access to the books
and records of the Fine Chemicals Business as they may reasonably require in order for
Ferro to satisfy any reporting and audit requirements; provided that Novolyte may restrict
access to information relating to any dispute between the parties or which is privileged.
Such access shall be during normal business hours and subject to at least five (5) days’
prior written notice. In addition to the foregoing, Novolyte shall provide Ferro
reasonable access to the books and records of the Fine Chemicals Business in order to
complete its review of the Closing Working Capital.




	6.5	 	Non-Competition; Non-Solicitation.






	 	(A)	 	Generally. Subject to Section 6.5(B), in order to protect the goodwill of the
Fine Chemicals Business, for a period of five (5) years after the Closing, neither
Ferro nor any of its Affiliates will, directly or indirectly, engage in, or have an
ownership interest in or act as agent, advisor, lender or consultant of or to any
person, firm, partnership, corporation or other entity that is engaged in the business
of designing, developing, formulating, manufacturing, marketing or selling the Products
currently sold by the Fine Chemicals Business (the “Non-Compete Business”). Nothing in
this Section 6.5(A), however, shall be deemed to prohibit or restrict Ferro or any of
its Affiliates –






	 	(1)	 	From continuing to conduct any business in which Ferro or its
Affiliates are currently engaged in the manner such business is conducted as of
the Closing;






	 	(2)	 	From acquiring or owning less than a 10% equity interest in any
publicly-traded company (whether or not such company is engaged in a business
that competes with the Non-Compete Business);






	 	(3)	 	From acquiring a controlling equity interest in any company or
other entity that is engaged in a business that competes with the Non-Compete
Business if the annual sales from such entity’s competing business or entity do
not exceed ten (10) percent of total revenues from such entity in the 12-month
period immediately preceding such acquisition; provided that the acquisition of
such competing business was not the principal purpose of such acquisition;






	 	(4)	 	From acquiring a controlling equity interest in any company or
other entity that is engaged in a business that competes with the Non-Compete
Business if the annual sales from such entity’s competing business or entity
exceed ten (10) percent but are less than forty percent (40%) of such business’
or entity’s total revenues in the 12-month period immediately preceding such
acquisition (“Acquired Competing Business”) provided that (i) the acquisition
of such Acquired Competing Business was not the principal purpose of such
acquisition and (ii) within thirty (30) days following the consummation of the
acquisition of the Acquired Competing Business Ferro shall notify Novolyte of
such acquisition, including a description in reasonable details of the nature
of the business and such other information as reasonably requested by Novolyte,
and offer Novolyte the opportunity to purchase the Acquired Competing Business.
If Novolyte makes such an offer to purchase the Acquired Competing Business it
shall do so in writing within thirty (30) days of the notification by Ferro.
Ferro and Novolyte shall negotiate in good faith to consummate such sale for a
period of sixty (60) days after receipt of Novolyte’s written offer. If Ferro
does not accept Novolyte’s offer for the Acquired Competing Business or
Novolyte and Ferro are otherwise unable to enter into a definitive agreement
for the sale of the Acquired Competing Business, Ferro may offer for sale the
Acquired Competing Business to a third party for a price greater than the
amount, or other terms more favorable, when viewed as a whole, than that
offered by Novolyte, as applicable. Notwithstanding anything herein to the
contrary, if Ferro has not disposed of the Acquired Competing Business within
eighteen (18) months after its acquisition (subject to such period being
extended pursuant to any bona fide letter of intent or written agreement that
Ferro has with a third party) and Novolyte made an offer to purchase such
business under this paragraph, then Ferro sell such business to Novolyte at the
price and otherwise on the terms specified in Novolyte’s offer notice;






	 	(5)	 	From conducting those activities described in Section 6.5(B)
hereto; and






	 	(6)	 	From Ferro Corporation being acquired by or merged into any
company or other entity that engages in a Non-Compete Business.






In order to protect the goodwill of the Fine Chemicals Business, for a period of
five (5) years after the Closing, neither Ferro nor any of its Affiliates will
induce or attempt to induce any customer, supplier or other business relation of the
Fine Chemicals Business to cease doing business with Novolyte or any of its
Affiliates and/or the Fine Chemicals Business or materially reduce the amount of
such business.




	 	(B)	 	Additional Agreements if Suzhou Equity Transfer Is Not Consummated. If the
Suzhou Equity Transfer is not consummated pursuant to the terms of the Suzhou Equity
Transfer Agreement, on or prior to June 30, 2009, then Ferro shall continue to operate
the Suzhou business for the benefit of Novolyte pursuant to the terms of the Management
and Transition Services Agreement and at such time as shall be mutually determined by
Novolyte and Ferro, Ferro shall sell, transfer and convey to Novolyte or its assignee
all of the Tangible Personal Property located at the Suzhou Location on an AS-IS basis
(the “Suzhou Personal Property”) for a price equal to $10 million (the “Suzhou Personal
Property Price”) minus the aggregate cost to Novolyte of (1) transporting the Suzhou
Personal Property to a location determined by Novolyte, and (2) purchasing or
establishing an operational business at such location having the same production
capabilities as the Suzhou business (items (1) and (2) hereof are collectively, the
“New Establishment Costs”); provided, however, in no event will the amount paid to
Ferro be less than $3.5 million and provided further, that the parties shall cause such
funds to be released from the Escrow Agent on or before December 31, 2009. For the
avoidance of doubt, Ferro may not (a) sell the Suzhou Personal Property to any third
party, or (b) use the Suzhou Personal Property for any purpose other than pursuant to
this Section 6.5(B), and Ferro Suzhou shall remain subject to the provisions of Section
6.5(A). For the avoidance of doubt, if the Suzhou Equity Closing has not occurred by
June 30, 2009 and has not otherwise been extended pursuant to the terms of the Suzhou
Equity Transfer Agreement, Novolyte shall be entitled to receive $6.5 million out of
the Escrow Funds on June 30, 2009 and Ferro shall be entitled to receive $3.5 million
out of the Escrow Funds by December 31, 2009.






	 	(C)	 	Relief and Other Matters. If any breach or threatened breach by Ferro of this
Section 6.5 or Section 8.1(E), Novolyte will be entitled to injunctive or other
equitable relief to restrain Ferro from engaging in conduct that would constitute a
breach of its obligations under this Purchase Agreement. Such relief will be in
addition to and not in lieu of any other remedies that may be available, including an
action for the recovery of damages. Ferro acknowledges and agrees that the provisions
of this Section 6.5 and Section 8.1(E) may be enforced by Novolyte or any successor or
assign of Novolyte and that the provisions of this Section 6.5 and Section 8.1(E) are
intended for the benefit of Novolyte and its Affiliates. Ferro agrees that if any
provision of this Section 6.5 or Section 8.1(E) shall be held to be unenforceable or
invalid, the remaining parts hereof shall nevertheless continue to be valid and
enforceable as though the invalid portions were not a part of this Purchase Agreement.
If the provisions of this Section 6.5 or Section 8.1(E) relating to the area of
restriction, the period of restriction, or the scope of restriction exceed the maximum
area, period of time or scope that a court of competent jurisdiction will enforce, said
area, period of time and scope shall, for purposes of this Purchase Agreement, be
deemed to be the maximum area or period of time or scope which a court of competent
jurisdiction would deem valid and enforceable. Ferro further acknowledges that (i) the
making of the restrictive covenants contained in this Section 6.5 and Section 8.1(E) by
it was a material inducement to Novolyte entering into this Purchase Agreement and (ii)
the restrictions contained in this Section 6.5 and Section 8.1(E) are fair, reasonable
and supported by legitimate business interests of Novolyte.






	6.6	 	Access to Former Business Records. For a period of seven years after the Closing, or until
any audits of Ferro’s Tax Returns relating to periods before or including the Closing are
completed, whichever occurs later, Novolyte will retain all business records constituting part
of the Acquired Assets. During such period, to the extent permitted by law, Novolyte will
afford duly authorized representatives of Ferro reasonable access to all of such records and
will permit such representatives, at Ferro’s expense, to make abstracts from, or to make
copies of any of such records created, produced, or obtained before the Closing; provided that
Novolyte may restrict access to information relating to any dispute between the parties or
which is privileged. During such period, Novolyte will, to the extent permitted by law,
cooperate with Ferro, and cause employees of the Fine Chemicals Business to cooperate with
Ferro, in furnishing information, evidence, testimony, and other assistance in connection with
any action, proceeding, or investigation relating to Ferro’s conduct of the Fine Chemicals
Business before the Closing.






	6.7	 	Access to Former Employees. After the Closing, each party will make available to the other
party the employees of Novolyte, Ferro, and the Fine Chemicals Business whom the other party
may reasonably need in order to defend or prosecute any legal or administrative action to
which Ferro or Novolyte are a party and which relates to the conduct of the Fine Chemicals
Business. The requesting party will pay or reimburse the other party for all reasonable
expenses which may be incurred by such employees in connection therewith, including all
travel, lodging, and meal expenses, and will further compensate the other party for the number
of whole business days spent by each such employee in providing such services at the rate of
130% of the average daily gross pay per business day (excluding the value of employee
benefits) of such employee during the calendar month in which such services are performed.






	6.8	 	Insurance Coverage. Subject to the terms set forth in Appendix Q relating to Ferro’s COBRA
obligations, at or after the Closing, Ferro and its Affiliates will have the right to
terminate any and all insurance coverage affecting the Fine Chemicals Business, provided that
other than any self-insured coverage, no such termination shall be solely related to the Fine
Chemicals Business, with the effect that Novolyte will have no right of recovery with respect
to any claim under policies or for refunds of premiums of insurance that previously covered
the Fine Chemicals Business. To the extent such insurance is maintained, Novolyte and the
Fine Chemicals Business will continue to be entitled to non-self-insured recoveries (net of
deductibles and out-of-pocket claims handling costs) after the Closing under occurrence-based
insurance policies in respect of insured events that occurred before the Closing, and Ferro
will, as directed by Novolyte, diligently pursue non-self-insured recoveries under such
policies (in the case of out-of-pocket expenses, at Novolyte’s cost) and promptly pay over
such net recoveries upon receipt. Ferro will be responsible for the administration of claims
for such recoveries, but shall have no obligation or responsibility for any payments, whether
premiums, deductibles or otherwise, in respect to any such policy.






	6.9	 	Trade Accounts Receivable/Collections. After the Closing, Ferro will permit, and hereby
authorizes Novolyte to collect, in the name of Ferro and Ferro Belgium, as applicable, all
Trade Accounts Receivable constituting part of the Acquired Assets and to endorse with the
name of Ferro or Ferro Belgium, as applicable, for deposit in Novolyte’s account any checks or
drafts received in payment thereof. Ferro will promptly deliver (and will cause Ferro Belgium
to promptly deliver) to Novolyte any cash, checks or other property that it may receive after
the Closing in respect of any Trade Accounts Receivable or other asset constituting part of
the Acquired Assets.





Article 7 — - Representations and Warranties




	7.1	 	Ferro’s Representations and Warranties Generally. Ferro represents and warrants to Novolyte
the following:






	 	(A)	 	Organization and Existence. Ferro is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Ohio and Ferro Suzhou is
a wholly-owned foreign enterprise organized and existing under the laws of the P.R.C.






	 	(B)	 	Capitalization of Ferro Suzhou. As of the date of this Agreement (which shall
be updated by Ferro immediately prior to the closing of the Suzhou Equity Transfer),
Ferro Suzhou’s authorized capital consists solely of a total investment of $8,032,000
(U.S.) and registered capital of $4,016,000 (U.S.), of which the Suzhou Equity Interest
is the only capital stock outstanding. The Suzhou Equity Interest has been duly
issued, has been fully paid, and is nonassessable. Neither Ferro nor Ferro Suzhou has
issued or granted to any person any option, warrant, conversion right, or other right
of any kind to acquire any other equity capital of Ferro Suzhou.






	 	(C)	 	Power and Authority. Ferro has full power and authority under its constitutive
documents and the laws of the State of Ohio to execute, deliver, and perform this
Purchase Agreement.






	 	(D)	 	Authorization. The execution, delivery, and performance of this Purchase
Agreement by Ferro has been duly authorized by all requisite corporate action on the
part of Ferro.






	 	(E)	 	Binding Effect. This Purchase Agreement is a valid, binding, and legal
obligation of Ferro.






	 	(F)	 	No Default. Neither the execution and delivery of this Purchase Agreement or
any Other Document nor Ferro’s full performance of its obligations under this Purchase
Agreement or any Other Document will violate or breach, or otherwise constitute or give
rise to a Default under, the terms or provisions of Ferro’s constitutive documents.






	 	(G)	 	Finders. With the sole exception of KeyBanc Capital Markets, Ferro has not
engaged and is not directly or indirectly obligated to any person acting as a broker,
finder, or similar capacity in connection with the transactions contemplated by this
Purchase Agreement.






	 	(H)	 	HSR Act. Ferro acknowledges that Novolyte is relying on the most recent
regularly prepared Fine Chemicals Business’ balance sheet as provided by Ferro for the
purpose of making its determination whether a filing is required to be made under the
HSR Act and Regulations, in respect of the transactions contemplated by this Purchase
Agreement and such most recent balance sheet is true and correct in all material
respects.






	7.2	 	Representations and Warranties Concerning the Fine Chemicals Business. Simultaneously with
the execution and delivery of this Purchase Agreement, Ferro is delivering to Novolyte
Disclosure Schedules, which will solely contain the information described in Appendix M (the
“Disclosure Schedules”). Ferro represents and warrants to Novolyte the following:






	 	(A)	 	Organization. Except for the Suzhou Equity Interest and as otherwise disclosed
on Part A of the Disclosure Schedule, neither Ferro nor Ferro Suzhou owns or holds any
other equity interest, directly or indirectly, in any company, corporation,
partnership, joint venture, business, firm, or other entity which engages in a
Non-Compete Business, and except for the Fine Chemicals Business, neither Ferro nor any
of its Affiliates is engaged in a Non-Compete Business.






	 	(B)	 	Financial Statements. Except as otherwise disclosed on Part B of the
Disclosure Schedule, the financial statements contained in Subparts B-1 to B-6 of the
Disclosure Schedule are (1) true, correct copies and complete in all material respects,
(2) are derived from management accounts created and maintained by Ferro and Ferro
Suzhou in the ordinary course in accordance with its respective standard practices, and
(3) present fairly and accurately, in all material respects, the financial position,
results of operations, and changes in financial condition of the Fine Chemical Business
at the dates and for the periods set forth therein.






	 	(C)	 	Inventories. Except as otherwise disclosed on Part C of the Disclosure
Schedule, (1) Ferro, Ferro Suzhou, Ferro Japan or Ferro Belgium, as applicable, Own all
Inventories described on Part C of the Disclosure Schedule; and (2) such Inventories
have been valued on the books of Ferro, Ferro Suzhou, Ferro Japan or Ferro Belgium, as
applicable, in accordance with the Accounting Principles.






	 	(D)	 	Trade Accounts Receivable. Except as otherwise disclosed on Part D of the
Disclosure Schedule, (1) all of the Trade Accounts Receivable arose out of the ordinary
course conduct of the Fine Chemicals Business, (2) Ferro, Ferro Suzhou or Ferro
Belgium, as applicable Own all of the Trade Accounts Receivable listed or described on
Part D of the Disclosure Schedule; (3) none of such Trade Accounts Receivable is owing
by Ferro or any of its Affiliates; and (4) the Trade Account Receivable are not subject
to any valid counterclaim or set off.






	 	(E)	 	Trade Accounts Payable. Except as otherwise disclosed on Part E of the
Disclosure Schedule, (1) all of the Trade Accounts Payable liabilities reflected on
Ferro’s, Ferro Suzhou’s or Ferro Belgium’s books arose out of the ordinary course
conduct of the Fine Chemicals Business; (2) no such liabilities are owing to Ferro or
any of its Affiliates; and (3) neither Ferro, Ferro Suzhou nor Ferro Belgium are in
Default under any note, bond, debenture, mortgage, indenture, security agreement,
guaranty, or other instrument of indebtedness.






	 	(F)	 	Real Property. Except as otherwise disclosed on Part F of the Disclosure
Schedule, (1) Ferro or Ferro Suzhou, as applicable, Own all of the Real Property listed
as “owned” on Subpart F 1 of the Disclosure Schedule; and there is no other
real property owned by Ferro or its Affiliates that is used primarily in connection
with the Fine Chemicals Business and there is no other real property owned by Ferro
Suzhou; (2) Ferro or Ferro Suzhou, as applicable, have good and marketable title in fee
simple to such Real Property, subject only to the Permitted Encumbrances and in the
case of the Real Property located in Louisiana, Ferro has full and exclusive right to
convey its interests in the Real Property; (3) the leases of real property listed as
“leased” on Subpart F 2 of the Disclosure Schedule are valid and subsisting
leases and there are no other real property leases used by Ferro or its Affiliates that
are primarily related to the Fine Chemicals Business other than as set forth on Subpart
F-2 of the Disclosure Schedule; (4) neither Ferro nor Ferro Suzhou nor any Affiliate is
in Default under any lease of any such real properties; (5) to the Knowledge of Ferro,
the improvements to the Real Property are, taking into account their age and prior use,
in reasonably good condition and repair for Ferro’s current business use of the Real
Property, ordinary wear and tear excepted; (6) the Existing Survey is a true and
correct survey of a portion of the Real Property located in the United States and there
have been no material changes to the Real Property represented by the Existing Survey
since the date of the Existing Survey that will be reflected on the Updated Survey if
obtained by Novolyte; (7) other than with regard to P.R.C. Environmental Laws or
Environmental Laws, which shall be exclusively handled in Part (M) hereof and Health
and Safety Laws and P.R.C. Health and Safety Laws, which shall be exclusively handled
in Part (N) hereof, neither Ferro or Ferro Suzhou have received any written notice of
(A) any violations (collectively, “Violations”, and individually, a “Violation”) of any
applicable law or requirements of any governmental authority having jurisdiction
against or affecting the Real Property or the construction, management, ownership,
maintenance, operation, use, or improvement thereof (collectively, “Legal
Requirements”), or (B) any condition relating to the Real Property which would
constitute a Violation; (8) other than with regard to P.R.C. Environmental Laws or
Environmental Laws, which shall be exclusively handled in Part (M) hereof and Health
and Safety Laws and P.R.C. Health and Safety Laws, which shall be exclusively handled
in Part (N) hereof, the Real Property is and on the Closing Date shall be in material
compliance with all Legal Requirements.






	 	(G)	 	Tangible Personal Property. Except as otherwise disclosed on Part G of the
Disclosure Schedule, (1) Ferro or Ferro Suzhou, as applicable, Own all tangible
personal property listed as “owned” on Subparts G 1 to G-3 of the Disclosure
Schedule; (2) the leases of tangible personal property listed as “leased” on
Subpart G 4 of the Disclosure Schedule are valid and subsisting leases (and there are
no tangible personal property leases used primarily in connection with the Fine
Chemicals Business except for those disclosed on Subpart G-4 of the Disclosure
Schedule); (3) neither Ferro nor Ferro Suzhou are in Default under any lease listed on
Part G (nor, to Ferro’s knowledge, is any lessor in default thereunder); and (4) the
items of tangible personal property listed on Part G of the Disclosure Schedule are,
taking into account their age and prior use, in reasonably good condition and repair,
ordinary wear and tear excepted.






	 	(H)	 	Intellectual Property. Except as otherwise disclosed on Part H of the
Disclosure Schedule, (1) Ferro or Ferro Suzhou, as applicable, Own all of the Acquired
Intellectual Property listed as “owned” on Subparts H-1 to H-4 of the
Disclosure Schedule; (2) the license, technology, or similar agreements to employ the
Acquired Intellectual Property listed as “licensed by” on Subpart H-5 of the
Disclosure Schedule are valid and subsisting agreements (and there are no such
agreements primarily related to the Fine Chemicals Business except for those disclosed
on Subpart H-5 of the Disclosure Schedule); (3) except with respect to the items listed
in such Subpart H-5 of the Disclosure Schedule, neither Ferro nor Ferro Suzhou is
obligated to pay any amount, whether as a royalty, license, fee, or other payment to
any person in order to use any of the Acquired Intellectual Property used by the Fine
Chemicals Business; (4) the license, technology, or similar agreements to employ the
Acquired Intellectual Property listed as “licensed to” on Subpart H-6 of the
Disclosure Schedule are valid and subsisting agreements; (5) except with respect to the
items listed in such Subpart H-6, neither Ferro nor Ferro Suzhou have granted any
rights or interest to any person in connection with any of the Acquired Intellectual
Property described in Part H of the Disclosure Schedule; (6) neither the conduct of the
Fine Chemicals Business nor use of the Acquired Intellectual Property by Ferro or Ferro
Suzhou infringes upon, violates or misappropriates the Intellectual Property rights of
any person, (7) Ferro or Ferro Suzhou Owns, solely and exclusively, or has the legal
right to use pursuant to a written license agreement, the Acquired Intellectual
Property; (8) each item of Acquired Intellectual Property listed as “owned” on Subparts
H-1 to H-4 of the Disclosure Schedule is subsisting; has not been abandoned or canceled
and has been maintained effective by all requisite filings, renewals and payments; (9)
no litigation is pending or, to Ferro’s knowledge, threatened against Ferro or Ferro
Suzhou, or to Ferro’s knowledge, pending or threatened against any officer, director,
stockholder, employee or agent of Ferro or Ferro Suzhou, for the infringement of any
Intellectual Property owned or allegedly owned by any other party; (10) since January
1, 2005, neither Ferro or Ferro Suzhou has received any written demands or written
offers to license alleging the items set forth in subjection 9 hereof, nor, to Ferro’s
knowledge, does any basis exist for any such litigation; (11) to Ferro’s knowledge,
there has been no infringement or unauthorized use by any other person of any Acquired
Intellectual Property; (12) since January 1, 2005, there have been no claims made in
writing or, to Ferro’s knowledge, threatened, by any third party contesting the
validity, use, enforceability or ownership of the Acquired Intellectual Property, and
to Ferro’s knowledge, there is no basis for the same; (13) Ferro and Ferro Suzhou have
taken commercially reasonable measures to protect the secrecy and confidentiality of
all material proprietary information and all material trade secrets used in the Fine
Chemicals Business; and (14) the Acquired Intellectual Property constitutes all of the
Intellectual Property Owned or used by Ferro and its Affiliates necessary for the
operation of the Fine Chemicals Business as presently conducted (except for the
services provided pursuant to the Other Documents and except for any tangible or
intangible property used by Ferro in providing corporate, accounting, human resource
and intellectual technology overhead functions to the Fine Chemicals Business).






	 	(I)	 	Indebtedness. Except as otherwise disclosed on Part I of the Disclosure
Schedule, neither Ferro nor Ferro Suzhou is in Default under any note, bond, debenture,
mortgage, indenture, security agreement, guaranty, or other instrument of indebtedness.






	 	(J)	 	Litigation. Except as otherwise disclosed on Part J of the Disclosure Schedule
and other than with regard to P.R.C. Environmental Laws or Environmental Laws, which
shall be exclusively handled in Part (M) hereof and Health and Safety Laws and P.R.C.
Health and Safety Laws, which shall be exclusively handled in Part (N) hereof, (1)
there exists no litigation, proceedings, actions, claims, or investigations at law or
in equity pending, or to Ferro’s knowledge, threatened with respect to the Fine
Chemicals Business or Ferro Suzhou; and (2) neither Ferro with respect to the Fine
Chemicals Business nor Ferro Suzhou are subject to any writ, injunction, order, or
decree of any court, agency, or other governmental authority.






	 	(K)	 	Contracts and Commitments. Except as otherwise disclosed on Part K of the
Disclosure Schedule, (1) each of the contracts, commitments, and other obligations
listed on Part K is a valid and binding obligation of Ferro or Ferro Suzhou, as
applicable, and, to Ferro’s knowledge, the other party or parties thereto; (2) neither
Ferro, Ferro Suzhou nor, to Ferro’s knowledge, any other party thereto has terminated,
cancelled, or substantially modified any contract, commitment, or other obligation
required to be identified in Part K of the Disclosure Schedule; (3) neither Ferro,
Ferro Suzhou nor, to Ferro’s knowledge, any other party thereto is in Default under any
contract, commitment, or other obligation required to be identified in Part K of the
Disclosure Schedule; and (4) neither the execution and delivery of this Purchase
Agreement or any Other Document nor Ferro’s performance of its obligations under this
Purchase Agreement or any Other Document will violate or breach, or otherwise
constitute or give rise to a Default under, the terms or provisions of any contract,
commitment, or other obligation to which Ferro is a party.






	 	(L)	 	Employees and Employee Benefits. Except as otherwise disclosed on Part L of
the Disclosure Schedule, (1) neither Ferro nor Ferro Suzhou have any employment
contracts in respect of the Fine Chemicals Business or its employees; (2) neither Ferro
nor Ferro Suzhou have any material pension, retirement, profit sharing, deferred
compensation, employee share option or share purchase, bonus, or incentive compensation
plans, schemes, or arrangements in respect of the Fine Chemicals Business or its
employees; (3) neither Ferro nor Ferro Suzhou have any material employee health,
dental, vision, life insurance, long-term or short-term disability, vacation, tuition
reimbursement, redundancy, severance or other social plans, schemes, or arrangements
relating and applicable to the Fine Chemicals Business or its employees; (4) none of
the Acquired Assets are subject to a lien under Title IV of ERISA; and (5) all Foreign
Plans maintained or contributed to by Ferro Suzhou are in material compliance with all
applicable laws.






	 	(M)	 	Compliance with Environmental Laws. Except as otherwise disclosed on Part M of
the Disclosure Schedule, (1) Ferro and Ferro Suzhou are, and have since January 1, 2005
been, in compliance with all Environmental Laws and P.R.C. Environmental Laws, as
applicable, to the Fine Chemicals Business and the Acquired Assets, including
Environmental Laws and P.R.C. Environmental Laws, as applicable, relating to emissions,
discharges, and releases of Hazardous Materials into land, soil, ambient air, water,
and the atmosphere, or relating to the generation, treatment, storage, transportation,
and disposal of Hazardous Materials; (2) Ferro and Ferro Suzhou have obtained all
material Permits required under Environmental Law and P.R.C. Environmental Laws, as
applicable, for its respective operation of the Fine Chemicals Business, and the Fine
Chemicals Business is, and has since January 1, 2005 been, in compliance with the terms
and conditions of all such Permits, respectively, and there is no suspension or
cancellation of any such Permits pending, or to Ferro’s knowledge threatened; (3)
except for Hazardous Materials used in compliance with applicable Environmental Laws or
P.R.C. Environmental Laws, and used in the ordinary course of the Fine Chemicals
Business, there exist no Hazardous Materials on, under, at, from or in the Acquired
Assets or the Ferro Suzhou Location, the presence of which would reasonably be expected
to have a materially adverse effect on the Fine Chemicals Business Condition; (4) since
January 1, 2005, neither Ferro nor Ferro Suzhou has received any written notice from
any governmental authority or third party of any actual or threatened Environmental
Matter or Environmental Condition, or asserting that Ferro or Ferro Suzhou has an
obligation to investigate, take corrective action, remediate or monitor any
Environmental Matter or Environmental Condition, pursuant to Environmental Laws or
P.R.C. Environmental Laws, as applicable; (5) Ferro has made available to Novolyte all
material environmental reports, assessments, audits, studies, investigations, data,
environmental Permits and other written environmental information prepared by
independent third parties since January 1, 2005 in the custody or possession of Ferro
concerning the Fine Chemicals Business, Ferro Suzhou and the Acquired Assets and the
Real Property and the Suzhou Location; (6) Ferro and Ferro Suzhou maintain all records
and have prepared and filed all lists, reports, and other information required pursuant
to, and has otherwise complied in all respects with, the Toxic Substance Control Act,
as amended, 15 U.S.C. 2601 et seq., and the rules and regulations thereunder, or P.R.C.
Environmental Laws, as applicable, with respect to the Products manufactured, sold or
distributed by the Fine Chemicals Business.






	 	(N)	 	Compliance with Health and Safety Laws. Except as otherwise disclosed on Part
N of the Disclosure Schedule and other than with regard to P.R.C. Environmental Laws or
Environmental Laws, which shall be exclusively handled in Part (M) hereof, (1) the Fine
Chemicals Business is in compliance with, and since January 1, 2005 has been conducted
in compliance with, all Health and Safety Laws and P.R.C. Safety Laws, as applicable;
and (2) neither Ferro nor Ferro Suzhou have received any written notice of any
violations with respect to Health and Safety Laws applicable to the Fine Chemicals
Business or P.R.C. Safety Laws, as applicable; and (3) Ferro and Ferro Suzhou have
obtained all Permits required under Health and Safety Laws and P.R.C. Safety Laws, as
applicable, for its respective current operation of the Fine Chemicals Business, and
the Fine Chemicals Business is, and has since January 1, 2005 been, in compliance with
the terms and conditions of all such Permits, respectively, and there is no suspension
or cancellation of any such Permits pending, or to Ferro’s knowledge threatened.






	 	(O)	 	Compliance with Other Laws. Except as otherwise disclosed on Part O of the
Disclosure Schedule and other than with regard to P.R.C. Environmental Laws or
Environmental Laws, which shall be exclusively handled in Part (M) hereof and Health
and Safety Laws and P.R.C. Health and Safety Laws, which shall be exclusively handled
in Part (N) hereof, (1) the Fine Chemicals Business is in compliance with all statutes,
ordinances, regulations, and other governmental requirements applicable to the conduct
of the Fine Chemicals Business, (2) neither Ferro nor Ferro Suzhou have received any
written notice of any violations with respect to such statutes, ordinances,
regulations, and other governmental requirements applicable to the conduct of the Fine
Chemicals Business, (3) Ferro or Ferro Suzhou, as applicable, is in compliance with all
Permits applicable to the Fine Chemicals Business as currently conducted by them
respectively, (4) the Permits are all Permits necessary to operate the Fine Chemicals
Business as currently conducted by Ferro or Ferro Suzhou, as applicable, and (5) no
suspension or cancellation of any Permits is pending or, to Ferro’s knowledge,
threatened.






	 	(P)	 	Taxes. Except as otherwise disclosed in Part P of the Disclosure Schedule
since January 1, 2005, (1) all Tax Returns required to be filed by the Fine Chemicals
Business before Closing with respect to the Fine Chemicals Business have been or will
be filed on or before the Closing; (2) all Taxes due and payable before Closing with
respect to the Fine Chemicals Business whether or not shown on any Tax Return have been
or will be paid when required by law; (3) the assets of the Fine Chemicals Business are
not encumbered by any unpaid Taxes other than a Permitted Encumbrance; (4) the Fine
Chemicals Business is not the beneficiary of any extension of time within which to file
any Tax Return; (5) no written claim has been made by a governmental authority in a
jurisdiction where the Fine Chemicals Business does not file Tax Returns that the Fine
Chemicals Business is or may be subject to taxation by that jurisdiction; (6) the Fine
Chemicals Business has withheld and paid all Taxes required to have been withheld and
paid in connection with amounts paid or owing to any employee, independent contractor,
creditor, stockholder, or other third party, and all Forms W-2 and 1099 (or any other
applicable form) required with respect thereto have been properly completed and timely
filed; (7) there is no dispute or claim concerning any Tax liability of the Fine
Chemicals Business claimed or raised by any taxing authority in writing; (8) the Tax
Returns described in Part P are accurate and complete copies, in all material respects,
of such Tax Returns; (9) the Fine Chemicals Business has not waived any statute of
limitations in respect of Taxes or agreed to any extension of time with respect to a
Tax assessment or deficiency; (10) the Fine Chemicals Business is not a party to any
Tax allocation or sharing agreement; (11) the Fine Chemicals Business (i) has not been
a member of an affiliated group filing a consolidated federal income Tax Return and
(ii) does not have any liability for the Taxes of any person (other than itself) under
Reg. § 1.1502-6 (or any similar provision of state, local, or foreign law), as a
transferee or successor, by contract, or otherwise; and (12) the Fine Chemicals
Business has collected all material sales, use and value added Taxes required to be
collected, and has remitted, or will remit on a timely basis, such amounts to the
appropriate taxing authority and has furnished properly completed exemption
certificates for all exempt transactions.






	 	(Q)	 	Insurance. Except as otherwise disclosed in Part Q of the Disclosure Schedule,
Ferro or Ferro Suzhou, as applicable, have insured or self-insure the assets and
properties of the Fine Chemicals Business against those insurable risks and to an
extent Ferro or Ferro Suzhou, as applicable, deem reasonably necessary for their
continued conduct of the Fine Chemicals Business and for protection against injury,
damage, or loss.






	 	(R)	 	No Material Events. Except as otherwise disclosed in the Disclosure Schedule,
(1) the Fine Chemicals Business has been conducted only in the ordinary and usual
course since December 31, 2007, and (2) no Material Events have occurred since December
31, 2007.






	 	(S)	 	Acquired Assets. Except as set forth on Part S of the Disclosure Schedule, (1)
Ferro Owns the Suzhou Equity Interest and the Acquired Assets, (2) immediately
following the Closing Novolyte will Own the Suzhou Equity Interest and the Acquired
Assets (other than Encumbrances created by Novolyte), (3) the Acquired Assets are in
the possession of Ferro and Ferro Suzhou or under Ferro’s or Ferro Suzhou’s control;
(4) the sale of the Acquired Assets to Novolyte pursuant to this Agreement will convey
to Novolyte all of the tangible and intangible property primarily used by Ferro and
Ferro Suzhou in their current conduct of the Fine Chemicals Business (except for the
Retained Assets, the services provided pursuant to the Other Documents and except for
any tangible or intangible property used by Ferro in providing corporate, accounting,
human resource and intellectual technology overhead functions to the Fine Chemicals
Business); and (5) the Acquired Assets, when combined with the services provided
pursuant to the Other Documents, will enable Novolyte to continue the conduct of the
Fine Chemicals Business as the same is currently being conducted by Ferro and Ferro
Suzhou (except for the services provided pursuant to the Other Documents and except for
any tangible or intangible property used by Ferro in providing corporate, accounting,
human resource and intellectual technology overhead functions to the Fine Chemicals
Business).






	 	(T)	 	Undisclosed Liabilities. Except as otherwise set forth on Part T of the
Disclosure Schedule,






	 	(1)	 	There is no liability that is an Assumed Liability of the
nature required to be disclosed in the liabilities column of a balance sheet
prepared in accordance with GAAP except for (a) liabilities for future
performance under Acquired Contracts, Acquired Leases, Acquired Licenses and
Acquired Permits, (b) liabilities set forth on the face of the most recent
balance sheet, and (c) liabilities of a similar nature to those set forth on
the most recent balance sheet which have arisen after the date thereof in the
ordinary course of Fine Chemicals Business.






	 	(2)	 	Ferro Suzhou has no liability that is an Assumed Liability of
the nature required to be disclosed in the liabilities column of a balance
sheet prepared in accordance with GAAP except for (a) liabilities for future
performance under Contracts, Leases, Licenses and Permits of Ferro Suzhou, (b)
liabilities set forth on the face of the most recent balance sheet, and (c)
liabilities of a similar nature to those set forth on the most recent balance
sheet which have arisen after the date thereof in the ordinary course of Fine
Chemicals Business.






	 	(U)	 	Suppliers. Except as otherwise set forth on Part U of the Disclosure Schedule,
no Top Ten Supplier or services to Ferro or Ferro Suzhou has notified Ferro or Ferro
Suzhou in writing that it intends to terminate its business relationship with Ferro or
Ferro Suzhou or materially decrease the rate of, or materially change the material
terms (whether related to payment, price or otherwise) with respect to, supplying
materials, products or services to Ferro or Ferro Suzhou, and there are no disputes
with a Top Ten Supplier of products or services to Ferro or Ferro Suzhou.






	 	(V)	 	Customers. Except as otherwise set forth on Part V of the Disclosure Schedule,
Ferro has not received any written notification from any Top Ten Customer of Ferro or
Ferro Suzhou to the effect that such customer will stop, materially decrease the rate
of, or materially change the terms (whether related to payment, price or otherwise)
with respect to, buying materials, products or services from Ferro or Ferro Suzhou.






	7.3	 	Novolyte’s Representations and Warranties. Novolyte represents and warrants to Ferro, as of
the date of this Agreement and the Closing, the following:






	 	(A)	 	Organization and Existence. Novolyte is a limited partnership duly organized,
validly existing and in good standing under the laws of the State of Delaware.






	 	(B)	 	Power and Authority. Novolyte has full corporate power and authority under its
constitutive documents and under the laws of the State of Delaware to execute, deliver,
and perform this Purchase Agreement.






	 	(C)	 	Authorization. The execution, delivery, and performance of this Purchase
Agreement have been duly authorized by all requisite corporate actions on the part of
Novolyte.






	 	(D)	 	Binding Effect. This Purchase Agreement is a valid, binding, and legal
obligation of Novolyte.






	 	(E)	 	No Default. Neither the execution and delivery of this Purchase Agreement nor
Novolyte’s full performance of its obligations under this Purchase Agreement will
violate or breach, or otherwise constitute or give rise to a Default under, the terms
or provisions of Novolyte’s constitutive documents or of any material contract,
commitment, or other obligation to which Novolyte is a party.






	 	(F)	 	Finders. Novolyte has not engaged and is not directly or indirectly obligated
to any person acting as a broker, finder, or similar capacity in connection with the
transactions contemplated by this Purchase Agreement.






	 	(G)	 	Novolyte’s Financing Plan. Simultaneously with the execution and delivery of
this Purchase Agreement, Novolyte has delivered to Ferro a true and complete copy of
the plan (“Novolyte’s Financing Plan”) by which Novolyte anticipates obtaining
sufficient cash funds to enable Novolyte to make the payment required under Section
2.8(A) above. Novolyte has no reason to believe that Novolyte’s Financing Plan cannot
or will not be implemented or that Novolyte will not have sufficient cash funds to make
the payment required under Section 2.8(A).






	 	(H)	 	Hart Scott Rodino. Novolyte has made a determination that no filing is
required under 16 C.F.R. § 801.10 of the HSR Act based upon the most recent balance
sheet for the Fine Chemicals Business attached as Schedule 7.3(H) provided by Ferro and
the mutual agreement of the parties to allocate $10 million of the Purchase Price to
the Suzhou Equity Interest.






	7.4	 	Meaning of “Ferro’s Knowledge”. Where a statement contained in this Article 7 is said to be
to the “Ferro’s knowledge” (or words of similar import) such expression means that, after
having conducted a reasonable internal due diligence review and in reliance on due diligence
certifications, both as described in Appendix N of Ed Frindt, Jim Love, Barry Misquitta, Tammy
Brice and Rick Watkins believe the statement to be true, accurate, and complete in all
material respects. Notwithstanding anything to the contrary in this Agreement or
certifications described in the preceding sentence and except with regard to claims related to
fraud, gross negligence or intentional misconduct by such person in delivering such
certificate, effective as of the Closing Ferro does hereby unconditionally and irrevocably
forever release and discharge each of the Transferred Employees from all actions, suits,
claims, causes of action, damages, liabilities and obligations, including without limitation
any liability arising or resulting from any breach of the representations and warranties made
by Ferro contained in this Agreement or the Other Documents. Nothing contained in any such
certifications shall affect the covenants, agreements, obligations and indemnities of Ferro
hereunder.






	7.5	 	Disclaimer. The warranties stated in this Article 7 are the only representations and
warranties either party has given the other party in connection with the transactions
contemplated by this Purchase Agreement. Except as set forth in this Article 7, neither party
has made, and each party expressly disclaims, any other or further representation or warranty,
either express or implied, concerning the subject matter of this Purchase Agreement. All
other warranties either party or anyone purporting to represent either party gave or might
have given, or which might be provided or implied by law or commercial practice, are hereby
excluded.





Article 8 — - Specific Obligations




	8.1	 	Employee Obligations. The parties’ respective obligations with respect to Employees will be
as follows:






	 	(A)	 	Employment. The parties acknowledge and agree that this Section 8.1(A) will
not apply to employees of Ferro Suzhou (the “Ferro Suzhou Employees”), which Ferro
Suzhou Employees will, notwithstanding the Suzhou Equity Transfer, remain employees of
Ferro Suzhou after the Suzhou Equity Closing. Effective as of the Closing, Novolyte
will offer employment in a comparable position to each employee primarily related to
the Fine Chemicals Business employed by Ferro and primarily engaged in the Fine
Chemicals Business who is listed on Appendix P (the “Employees”), and in good faith
encourage such Employees to accept such offers of employment, provided that Novolyte
may (in accordance with its regular procedures) terminate the employment of, or
(subject to Clause B below), otherwise modify the terms of such employment at any time
after the Closing for any Transferred Employee (as defined below); provided, however,
that Novolyte will not take or omit to take any action that could result in any
liability to Ferro under the Worker Adjustment and Retaining Act (WARN), 29 U.S.C. Sec.
2101 with respect to any Employee, which relates to a termination of employment that
occurs on or before the Closing. Ferro will cooperate in facilitating the performance
of Novolyte’s obligation to make such offers and will in good faith encourage Employees
who receive offers from Novolyte to accept such offers. The Employees offered
employment by Novolyte and who accept such offers, together with the Ferro Suzhou
Employees, are collectively referred to herein as the “Transferred Employees”.
Novolyte will not offer employment to each Ferro employee or former employee primarily
related to the Fine Chemicals Business listed on Appendix O and any employee not
related to the Fine Chemicals Business (the “Excluded Employees”).






	 	(B)	 	Terms of Employment. Novolyte will provide the Transferred Employees,
effective as of the Closing through the one year anniversary of the Closing, with (1)
annual base salary and bonus opportunity that is not less than the annual base salary
and bonus opportunity which they were receiving immediately before the Closing, (2)
benefits which in the aggregate are not less than that which they were receiving
immediately before the Closing (excluding retiree medical benefits, defined benefit
plan, stock-based compensation, bonuses related to this transaction and any benefit
provided under a retiree benefit plan but including a medical and dental plan and a
401(k) plan), and (3) if there is a termination of employment during such one year
period under circumstances in which such Transferred Employee would have been entitled
to severance pay and/or benefits if he or she had terminated employment with Ferro
immediately before the Closing, severance pay and/or severance benefits substantially
equivalent to the severance pay and/or severance benefits set forth on Schedule 8.1(B),
but counting service with Novolyte (for the avoidance of doubt, any severance pay and
benefit shall exclude retiree medical benefits, defined benefit plan benefits, and
stock-based compensation).






	 	(C)	 	Pay and Benefits. Ferro will retain all liabilities related to or arising
under all Employee Benefit Plans and Foreign Plans (other than Foreign Plans maintained
by Ferro Suzhou) and will be solely responsible for all pay and benefits of all Ferro
employees (other than Transferred Employees) earned or incurred before and after the
Closing and for pay and benefits of the Transferred Employees earned or incurred before
the Closing. Novolyte will be solely responsible for all pay and benefits of the
Transferred Employees that is earned or incurred on and after the Closing, but only to
the extent such pay and benefits is with respect to services performed for Novolyte on
and after Closing. The parties’ respective obligations with respect to employee
retirement plans and employee welfare plans shall be as set forth on Appendix Q.






	 	(D)	 	Severance and Bonuses. Ferro will be solely responsible for any and all
severance pay and benefits that become due contractually or by law to all employees of
Ferro on termination of their employment with Ferro, as applicable. Novolyte will be
solely responsible the severance pay set forth in Section 8.1(B) as a result of a
termination of employment with Novolyte after the Closing. Ferro will be solely
responsible for the payment to any U.S. Transferred Employee of a bonus or other
incentive with respect to services performed during the period before the Closing.






	 	(E)	 	Non-Interference. Neither Ferro nor any of its Affiliates will employ or offer
employment to any Transferred Employee during the twenty-four (24) month period
following the Closing without the prior written consent of Novolyte. During such
period, neither Novolyte nor its Affiliates will, without the prior written consent of
Ferro, employ or offer employment to an Excluded Employee or to any former employee of
the Fine Chemicals Business who retired from or voluntarily terminated employment with
Ferro or Ferro Suzhou, as applicable, from April 14, 2008 to the Closing Date and that
is listed on Appendix O.






	 	(F)	 	Third Party Beneficiaries.






	 	(1)	 	All provisions contained in this Section 8.1 are included for
the sole benefit of the parties hereto, and nothing in this Agreement, whether
express or implied, shall create any third party beneficiary or other rights
(a) in any other person, including, without limitation, any employees or former
employees of Ferro, Ferro Suzhou or their Affiliates, any participant in any
Employee Benefit Plan or Foreign Plan, or any dependent or beneficiary thereof,
or (b) to continued employment with Novolyte or any of its Affiliates.






	 	(2)	 	Notwithstanding anything in this 8.1 to the contrary, nothing
contained herein, whether express or implied, shall be treated as an amendment
or other modification of any Employee Benefit Plan or Foreign Plan. If (a) a
party other than the parties hereto makes a claim or takes other action to
enforce any provision in this Agreement as an amendment to any Employee Benefit
Plan or Foreign Plan, and (b) such provision is deemed to be an amendment to
such Employee Benefit Plan or Foreign Plan even though not explicitly
designated as such in this Agreement, then, solely with respect to such
Employee Benefit Plan or Foreign Plan, such provision shall lapse retroactively
and shall have no amendatory effect with respect thereto.






Ferro’s duties and obligations arising out of the foregoing provisions of this Section 8.1
are “Ferro’s Employee Obligations. “Novolyte’s and its Affiliate’s duties and obligations
arising out of the foregoing provisions of this Section 8.1 are the “Novolyte’s Employee
Obligations.”




	8.2	 	Environmental Obligations. The parties’ respective obligations with respect to Environmental
Matters will be as follows:






	 	(A)	 	Identified Environmental Matters. Subject to reasonable consultation with and
information from Novolyte, Ferro will have authority for managing any necessary
corrective action or remediation of any Environmental Condition resulting from the
Environmental Matters identified on Appendix R-1 (collectively, the “Identified
Environmental Matters”) and will be responsible for the cost of any such corrective
action or remediation and any other costs or expenses incurred in connection with the
Identified Environmental Matters. Novolyte hereby grants Ferro a limited license to
enter upon the Baton Rouge Location of the Fine Chemicals Business for the limited
purpose of carrying out any such corrective action or remediation pursuant to item 1 on
Appendix R-1. Unless otherwise agreed upon by the parties (including on Appendix R-1)
in writing, Novolyte will also make available to Ferro at actual cost, such utilities,
materials, chemicals and labor at the Baton Rouge Location as Ferro may reasonably
require in order to carry out such corrective action or remediation. Ferro agrees to
carry out and complete any corrective action or remediation required to address the
Identified Environmental Matters in accordance with applicable Environmental Laws or
P.R.C. Environmental Laws, as the case may be, in effect at the time of such corrective
action or remediation and in such a way as to minimize any interference with the
operations of the Fine Chemicals Business or any other industrial fine chemicals
business of Novolyte or its successors. Any such corrective action or remediation will
be undertaken to correct or ameliorate any Identified Environmental Matter consistent
with the use of such Real Property as an industrial site operating a fine chemicals
business. Novolyte reserves all rights and remedies at law or in equity for any costs
or expenses incurred by Novolyte to address any Environmental Condition arising
post-Closing as a direct result of Ferro’s acts or omissions in undertaking the work
required hereunder to address the Identified Environmental Matters.






	 	(B)	 	Unknown Environmental Matters.






	 	(1)	 	Environmental Investigations and Testing. After the Closing,
Novolyte and its successors and assigns will not conduct any environmental
investigation or testing with respect to the Real Properties unless:






(a) such investigation or testing is required by Environmental Law or
P.R.C. Environmental Law; or




(b) such investigation or testing is necessary in order to respond to
an unsolicited written claim by a third party (other than a successor
or assign of Novolyte or the Fine Chemicals Business) relating to an
Environmental Matter; provided, however, that Novolyte’s failure to
comply with the provisions of this Section 8.2(B)(1) shall only
affect Novolyte’s rights to indemnification under Section 8.2(B) to
the extent an Environmental Matter other than an Identified
Environmental Matter is discovered as a direct result of an
investigation or testing conducted by Novolyte in contravention of
this Section 8.2(B)(1), and in no other event shall Ferro’s
Environmental Obligations under Section 8.2 otherwise be affected or
reduced.




	 	(2)	 	Procedure. If an Environmental Matter other than an Identified
Environmental Matter is identified on Appendix R-2, in the Disclosure
Schedules, or after the Closing, then






(a) Novolyte will conduct a preliminary investigation to determine
whether corrective action, remedial action or monitoring is legally
required under Environmental Law or P.R.C. Environmental Law, as the
case may be, with respect to such Environmental Matter and thus
constitutes an “Environmental Condition.” If at any time after the
Closing, Novolyte proposes to conduct any sort of intrusive or
invasive environmental testing in compliance with Section 8.2(B)(1)
hereof, Novolyte will provide Ferro at least one (1) week prior
notice in writing of such proposal with a description of the testing
to be conducted and the manner in which such testing will be
conducted, and promptly make available to Ferro the final test
results and any final reports prepared by or for Novolyte with
respect to the test results.




(b) If Novolyte determines, in its reasonable, good faith judgment
and upon reasonable consultation with and information from Ferro,
that such Environmental Matter constitutes an Environmental Condition
for which Ferro may be liable under this Section 8.2, then Novolyte
will give Ferro timely notice of the facts and circumstances that
caused Novolyte to conclude that such Environmental Matter is or was
an Environmental Condition.




(c) Novolyte will, in reasonable consultation with and with
information from Ferro, in good faith, design and develop, and
deliver to Ferro, a plan or program (a “Remediation Plan”) for
remediating, correcting or ameliorating the Environmental Condition
and Novolyte agrees to use reasonable efforts to use low cost
alternatives, based upon standards that are the minimum standards
required under Environmental Law or P.R.C. Environmental Law, as the
case may be, applicable to the industrial operations of the Fine
Chemicals Business, including the use of institutional controls and
deed restrictions limiting future use of the Real Property for
industrial fine chemical purposes. (A written Remediation Plan that
satisfies the requirements of the preceding sentence and is delivered
to Ferro is referred to below as an “Economic Remediation Plan.”)
Ferro shall within thirty (30) days of receipt of the Economic
Remediation Plan respond in writing to Novolyte with respect to the
proposed Remediation Plan. If Ferro does not respond in writing
within thirty (30) days, Ferro will be deemed to have approved of the
Remediation Plan. If Ferro responds in writing within that timeframe
and, in its reasonable, good faith judgment disagrees in any material
respect with the course of action proposed in the Remediation Plan,
the Remediation Plan will be deemed to be a disputed item and will be
subject to the provisions of Section 10; provided, however, that
nothing in this Section 8.2(B)(2) shall preclude or prevent Novolyte
from undertaking any immediate corrective or remedial action required
in Novolyte’s reasonable judgment to be taken to address an imminent
threat to human health, safety, or the environment.




(d) Novolyte will be responsible for carrying out all Remediation
Plans under this Section 8.2(B), provided, however, that any and all
costs or expenses incurred in connection therewith will be subject to
the allocation provisions under Section 8.2(B)(3), the limitations
set forth in Section 8.2(B)(4) and in all other respects, will be
governed by Article 9.




	 	(3)	 	Responsibilities. Subject to the limitations of Section
8.2(B)(4) below, (A) Ferro will be solely responsible for: (i) the cost of
preparing and implementing any Economic Remediation Plan and any other costs
and expenses that relate exclusively to conditions, existing or actions,
omissions or practices of Ferro or Ferro Suzhou in its conduct of the Fine
Chemicals Business, before the Closing, or actions, omissions or practices of
any of Ferro’s predecessors-in-interest, at the Real Property carried out
before the Closing; and (ii) any fines, penalties, costs and expenses required
to address those items described on Appendix R-2, and (B) Ferro and Novolyte
will share responsibility for the cost of any Economic Remediation Plan and any
other costs and expenses that relate partially to actions, omissions or
practices which the Fine Chemicals Business carried out by Ferro, Ferro Suzhou
or Ferro’s predecessor-in-interest at the Real Property before the Closing and
which Novolyte carries out after the Closing, or if it cannot be determined
whether the Environmental Condition arose from actions, omissions or practices
prior to or after the Closing, on the following basis:






	 	(a)	 	Subject to the limitations of Section 8.2(B)(4)
below, Ferro will be responsible for that portion of the Actual Amount
of the costs of Economic Remediation Plans and any other costs or
expenses that equals the following:






	 	(b)	 	The total costs of carrying out Economic
Remediation Plans and any other costs or expenses minus






	 	(i)	 	The appropriate one of the
following two amounts –






	 	(A)	 	If the costs
resulting from the Environmental Condition are directly
proportional to the amount of Hazardous Materials that
were used, emitted, discharged or released and the
amount of Hazardous Materials is known or estimable with
a high degree of reliability, then total costs of
carrying out such Economic Remediation Plans and any
other costs or expenses times a fraction






	 	 	 	(1)
the numerator of which is the amount of
Hazardous Materials contributed by Novolyte to
the Environmental Condition after the Closing,
and






	 	 	 	(2)
the denominator of which is the total amount of
Hazardous Materials contributed by both Ferro
before the Closing and Novolyte after the
Closing; or






	 	(B)	 	If either the
costs resulting from the Environmental Condition are not
directly proportional to the amount of Hazardous
Materials that were used, emitted, discharged or
released or the amount of Hazardous Materials is not
known or not estimable with a high degree of
reliability, then the following percentage of the costs
of carrying out such Economic Remediation Plans and any
other costs or expenses shall apply:





	 	 	 	 	 	 	 	 	 
	Years After Closing	 	Ferro’s Share	 	Novolyte’s Share
	First
	 	 	100.0	%	 	 	0.0	%
	 
	 	 	 	 	 	 	 	 
	Second
	 	 	100.0	%	 	 	0.0	%
	 
	 	 	 	 	 	 	 	 
	Third
	 	 	76.9	%	 	 	23.1	%
	 
	 	 	 	 	 	 	 	 
	Fourth
	 	 	71.4	%	 	 	28.6	%
	 
	 	 	 	 	 	 	 	 
	Fifth
	 	 	66.7	%	 	 	33.3	%
	 
	 	 	 	 	 	 	 	 
	Sixth
	 	 	62.5	%	 	 	37.5	%
	 
	 	 	 	 	 	 	 	 
	Seventh
	 	 	58.8	%	 	 	41.2	%
	 
	 	 	 	 	 	 	 	 
	Eighth
	 	 	55.6	%	 	 	44.4	%
	 
	 	 	 	 	 	 	 	 
	Ninth
	 	 	52.6	%	 	 	47.4	%
	 
	 	 	 	 	 	 	 	 
	Tenth
	 	 	50.0	%	 	 	50.0	%
	 
	 	 	 	 	 	 	 	 
	Eleventh and Thereafter
	 	 	0.0	%	 	 	100.0	%
	 
	 	 	 	 	 	 	 	 







	 	(4)	 	Limitations. Notwithstanding the provisions of Section
8.2(B)(3) above, Ferro’s obligations under Section 8.2(B) relating to any and
all Environmental Matters and Environmental Conditions that are not Identified
Environmental Matters and Ferro’s liability with respect to such obligations,
together with its indemnity obligations under Article 9 below for breaches of
Section 7.2(M), are subject to the following limitations: In no event will
Ferro have any responsibility for any unknown Environmental Matter or
Environmental Condition (i) for which Novolyte has not given Ferro notice in
accordance with Section 9.3 on or before 5:00 PM (Eastern Time) on the date
that is ten (10) years following the Closing Date, and (ii) that, individually
or in the aggregate, exceeds Twelve Million Dollars ($12,000,000).






	 	(C)	 	Novolyte’s Sole Responsibilities. In addition to the foregoing, Novolyte will
be solely responsible for the total cost of carrying out Remediation Plans and
discharging any other liability resulting from Environmental Matters or Environmental
Conditions that relate solely to conditions first existing, or actions, omissions or
practices of Novolyte after the Closing, and the provisions of Section 8.2(B)(2) shall
not apply to any such Environmental Conditions or related Remediation Plans.






Ferro and Ferro Suzhou’s duties and obligations arising out of the foregoing provisions of
this Section 8.2 are “Ferro’s Environmental Obligations.” Novolyte’s duties and
obligations arising out of the foregoing provisions of this Section 8.2 are “Novolyte’s
Environmental Obligations.”




	8.3	 	Novolyte’s Sole Remedy. Novolyte acknowledges that Ferro’s Environmental Obligations are
exclusively set forth in Section 7.2(M) and Section 8.2 and that Section 8.2, this Section
8.3, Section 9.2, Section 9.3, Section 9.4, Section 9.6(B), Section 9.7, Section 9.8, Section
9.9 and Section 9.10, set forth Novolyte’s sole and exclusive remedy with respect thereto and
Novolyte hereby waives any other or further rights of recovery Novolyte might otherwise have
against Ferro with respect to such matters. For clarification purposes only (a) Ferro’s
maximum liability with regard to any environmental matter that is not an Identified
Environmental Matter shall be without duplication and shall not exceed $12 million, and (b) no
representation set forth in Section 7.2 other than Section 7.2(M) shall provide a basis for
Ferro’s Environmental Obligations, and (c) any matter disclosed on Disclosure Schedule 7.2(M)
or Appendix R-1 shall be subject to the terms of Section 8.2, including Sections 8.2(B)(3) and
(4).






	8.4	 	Disclosure Schedules Updates.






	 	(A)	 	Disclosure Schedule Updates for Purposes of this Agreement.
From time to time before the Closing, Ferro will supplement and amend the
Disclosure Schedules with respect to any material matter hereafter arising
which, if existing or occurring at or before the date of this Purchase
Agreement or before Closing, would have been required to be set forth or
described therein or which is necessary to complete or correct any information
therein or in any representation or warranty of Ferro which has been rendered
inaccurate thereby. In the case of any supplement or amendment which should
have been disclosed as of the date of this Agreement such that it constitutes a
pre-signing breach, such supplement or amendment shall only effect the
satisfaction of the condition to Closing set forth in Section 4.1(B) if such
matters reflect conditions or circumstances that would give rise to damages to
Novolyte in excess of One Million Dollars ($1,000,000) in the aggregate, and if
Novolyte does not terminate this Purchase Agreement due to failure to satisfy
such condition set forth on Section 4.1(B), and the Closing occurs, Novolyte
will not be deemed to have waived any right or claim pursuant to the terms of
this Agreement, including pursuant to Article 9, with respect to any matter
disclosed pursuant to any such supplement or amendment made by Ferro at or
before the Closing. In the case of any supplement or amendment which
constitutes a post-signing breach, such supplement or amendment will only
effect the satisfaction of the condition to Closing set forth in Section 4.1(B)
if such matters reflect conditions or circumstances that would result in a
material and adverse effect on the Fine Chemicals Business Condition, and if
Novolyte does not terminate this Purchase Agreement due to failure to satisfy
such condition set forth on Section 4.1(B), and the Closing occurs, Novolyte
will not be deemed to have waived any right or claim pursuant to the terms of
this Agreement, including pursuant to Article 9, with respect to any matter
disclosed pursuant to any such supplement or amendment made by Ferro at or
before the Closing.






	 	(B)	 	Disclosure Schedule Updates for Purposes of the Equity Transfer Agreement.
From time to time between the signing of the Suzhou Equity Transfer Agreement and the
Suzhou Equity Closing, Ferro will supplement and amend Section 6.1 of the Suzhou Equity
Transfer Agreement and Parts 7.2(A), (I), (M), (N), (O), (P), (Q) and (S) of the
Disclosure Schedules with respect to Ferro Suzhou and any material matter hereafter
arising which, if existing or occurring at or before the date of the signing Suzhou
Equity Transfer Agreement or before the Suzhou Equity Closing, would have been required
to be set forth or described therein or which is necessary to complete or correct any
information therein or in any representation or warranty of Ferro with regard to Ferro
Suzhou which has been rendered inaccurate thereby. In the case of any supplement or
amendment which should have been disclosed as of the date of the Suzhou Equity Transfer
Agreement such that it constitutes a pre-signing (of the Suzhou Equity Transfer
Agreement) breach, such supplement or amendment shall only effect the satisfaction of
the condition to the Suzhou Equity Closing set forth in Section 6.1 of this Purchase
Agreement if such matters reflect conditions or circumstances that would give rise to
damages to Novolyte in excess of Two Hundred Thousand Dollars ($200,000) in the
aggregate, and if Novolyte does not terminate the Suzhou Equity Transfer Agreement due
to failure to satisfy such condition set forth on Section 6.1 of this Purchase
Agreement, and the Suzhou Equity Closing occurs, Novolyte will not be deemed to have
waived any right or claim pursuant to the terms of this Agreement, including pursuant
to Article 9, with respect to any matter disclosed pursuant to any such supplement or
amendment made by Ferro with regard to Ferro Suzhou at or before the Suzhou Equity
Closing. In the case of any supplement or amendment which constitutes a breach
following the signing of the Suzhou Equity Transfer Agreement, such supplement or
amendment will only effect the satisfaction of the condition to the Suzhou Equity
Closing set forth in Section 6.1 of this Purchase Agreement if such matters reflect
conditions or circumstances that would result in a material and adverse effect on Ferro
Suzhou, and if Novolyte does not terminate the Equity Transfer Agreement due to failure
to satisfy such condition set forth in Section 6.1 of this Purchase Agreement, and the
Suzhou Equity Closing occurs, Novolyte will be deemed to have waived any right or claim
pursuant to the terms of this Agreement, including pursuant to Article 9, with respect
to any matter disclosed pursuant to any such supplement or amendment made by Ferro with
regard to Ferro Suzhou at or before the Suzhou Equity Closing. Notwithstanding the
terms of this Section 8.4, Ferro shall have a right to cure any pre-signing or
post-signing breach.






	8.5	 	Coordination of Public Announcements After the Closing. From and after the Closing, no party
will make any public announcement concerning the transactions contemplated by this Purchase
Agreement without having previously consulted with and having received the consent of the
other parties, such consent not to be withheld unreasonably. Nothing in the preceding
sentence, however, will prevent any party from making any announcement required by law, by the
rules of any securities exchange, or by any listing agreement with a securities exchange to
which such party is a party or by which it is bound. The parties will cooperate in the
planning, preparation, and issuance of any and all post-Closing public announcements
concerning this Purchase Agreement and the transactions contemplated by this Purchase
Agreement.





Article 9 — - Indemnification




	9.1	 	Indemnification of Ferro. Subject to the limitations set forth in this Purchase Agreement,
Novolyte will indemnify, (in the case of third party claims) defend and hold Ferro harmless,
from and against the Actual Amount of any and all liabilities, damages, claims, costs, and
expenses (including reasonable attorneys’ fees) arising out of or resulting from –






	 	(A)	 	Any misrepresentation or breach of warranty by Novolyte under
Section 7.3 or under any Other Agreement delivered by Novolyte pursuant to this
Purchase Agreement;






	 	(B)	 	Non-performance by Novolyte of any obligations to be performed
by or on the part of Novolyte under this Purchase Agreement or under any Other
Agreement delivered by Novolyte pursuant to this Purchase Agreement; or






	 	(C)	 	The Assumed Liabilities.






	9.2	 	Indemnification of Novolyte. Subject to the limitations set forth in Section 8.2, Section
9.5 and Section 9.6, Ferro will indemnify, (in the case of third party claims) defend and hold
Novolyte, together with its successors and the Affiliates of each of them, harmless, from and
against the Actual Amount of any and all liabilities, damages, claims, costs, and expenses
(including reasonable attorneys’ fees) arising out of or resulting from –






	 	(A)	 	Any misrepresentation or breach of warranty by Ferro under
Section 7.1 of this Purchase Agreement;






	 	(B)	 	Any misrepresentation or breach of warranty by Ferro under
Section 7.2 of this Purchase Agreement for which notice is given by Novolyte
within the period specified in Section 9.6 or Section 8.2(B)(4), as the case
may be;






	 	(C)	 	Any misrepresentation or breach of warranty by Ferro, Ferro
Suzhou or any of their respective Affiliates under any Other Agreement
delivered by Ferro or Ferro Suzhou or any of their respective Affiliates
pursuant to this Purchase Agreement for which notice is given by Novolyte
within the period specified in Section 9.6 or Section 8.2(B)(4), as the case
may be;






	 	(D)	 	Subject to the limitations set forth in Article 8, the
non-performance by Ferro of any obligation to be performed by or on the part of
Ferro under this Purchase Agreement (or by Ferro, Ferro Suzhou or any of their
respective Affiliates under any Other Agreement delivered by such person
pursuant to this Purchase Agreement); or






	 	(E)	 	The Retained Liabilities.






	9.3	 	Claims. If either party desires to make a claim against the other under Section 9.1 or 9.2
which does not involve a claim by any person other than the parties, then such party shall
make such claim by delivering written notice to the other within a reasonable period of time.
If either Novolyte or Ferro (the “Claimant”) desires to make a claim against the other (the
“Indemnitor”) under Section 9.1 or 9.2 which involves a claim by a person other than the
parties, then such claim will be made in the following manner and be subject to the following
terms and conditions:






	 	(A)	 	Notice. The Claimant will give notice to the Indemnitor within a reasonable
period of time of any written demand, claim, or threat of litigation or the actual
institution of any action, suit, or proceeding (collectively, a “Claim”) at any time
served on or instituted against the Claimant with respect to which the Claimant
believes it would have a right of indemnification under Section 9.1 or 9.2. In
providing such notice, the Claimant shall only state the existence of such Claim and
shall not admit or deny the validity of the facts or circumstances out of which such
Claim arose. The failure of a party to provide notice of a Claim within a reasonable
time shall not affect such party’s right to indemnification hereunder unless the
failure to provide such notice within a reasonable period of time materially and
adversely prejudices the defense of such Claim.






	 	(B)	 	Responsibility for Defense. Within 30 days after receipt of any such notice,
but not less than five working days before the time the Claimant is required to respond
to a Claim, the Indemnitor will, by giving written notice to the Claimant, have the
right to assume responsibility for the defense of the Claim in the name of the Claimant
or otherwise as the Indemnitor may elect; provided that the Indemnitor also
acknowledges in writing that it does have responsibility to indemnify the Claimant with
respect to such Claim. Otherwise, the Claimant will have responsibility for the
defense of the Claim. Notwithstanding the foregoing, (i) the Indemnitor may not assume
the defense of such Claim to the extent the Claim involves criminal conduct or seeks an
injunction or other equitable relief other than a claim for money damages, and (ii) the
Claimant shall have the right at anytime to defend such Claim if (x) the amount in
controversy exceeds any applicable cap under this Purchase Agreement, (y) an adverse
judgment with respect to such Claim is, in the good faith judgment of the Claimant,
reasonably likely to establish a precedent, custom or practice that is materially
adverse to the continuing business interests of the Claimant, or (z) the Indemnitor
fails to meet or indicates that it intends to fail to meet any required deadline
associated with such Claim. Subject to the provisions of subsections 9.3(C) and (D)
below, the party having responsibility for defense of a Claim (the “Defending Party”)
will have the full authority to defend, cure, adjust, compromise, or settle such Claim
or appeal any judgment or ruling of a court or other tribunal in connection with such
Claim in its own name and/or in the name of the other party.






	 	(C)	 	Right to Participate. Notwithstanding a Defending Party’s responsibility for
the defense of a Claim, the other party shall have the right to participate, at its own
expense and with its own counsel, in the defense of a Claim and the Defending Party
will consult with the other party from time to time on matters relating to the defense
of such Claim. The Defending Party will provide the other party with copies of all
pleadings and material correspondence, documentation and information relating to such
Claim.






	 	(D)	 	Settlement. A Defending Party will provide the other party with timely written
notice of any proposed adjustment, compromise, or other settlement, including equitable
or injunctive relief, of a Claim which the Defending Party intends to propose or
accept. If the other party fails to provide the Defending Party with timely written
notice of objection to such settlement, then the Defending Party shall have the
authority to propose or accept such settlement and enter into any agreement, in its own
name and/or in the name of the other party, giving legal effect to all aspects of such
settlement. If the other party objects to such settlement and such settlement involves
the payment of monetary damages only (and not injunctive or other equitable relief),
then the Defending Party may, if it so elects, tender the defense to the other party by
paying to such other party the amount of money proposed to be paid in settlement of the
Claim, in which case the Defending Party shall have no further liability to the other
party under this Purchase Agreement with respect to such Claim and the other party
shall have full authority for the future defense of such Claim and full responsibility
for any and all liabilities, obligations, costs, and expenses resulting therefrom.
Notwithstanding the foregoing the Indemnitor shall not be entitled to settle any Claim
without the written consent of the Claimant if such settlement does not include a
written release of the Claimant from all liability in respect of such Claim.






	 	(E)	 	Tax Claims. Notwithstanding anything in this Agreement to the contrary, Ferro
shall control, at its expense, any Tax Claim; provided that if the settlement of any
such proceeding will have the effect of increasing Novolyte’s liability for Taxes under
this Agreement or for periods related to any period that is not a Pre-Closing Straddle
Period or a Pre-Closing Tax Period, Novolyte shall, at its expense, have the right to
participate in such proceedings and in such case Ferro (or Ferro Suzhou, as the case
may be) shall not enter into any settlement without the prior written consent of
Novolyte, which consent shall not be unreasonably withheld, conditioned or delayed.






	9.4	 	Disputed Responsibility. If, after receiving a written indemnification notice under Section
9.3(A), the party receiving such notice disputes —






	 	(A)	 	The fact that such party in fact made a misrepresentation or
breach of a warranty under this Purchase Agreement (or under any Other
Agreement) giving rise to the claim to which the notice relates or that any
such misrepresentation or breach in fact gave rise to the liabilities, damages,
claims, costs, or expenses for which the other party seeks indemnification
under this Article 9;






	 	(B)	 	The fact that such party in fact failed to perform any
obligation to be performed on the part of that party under this Purchase
Agreement (or under any Other Agreement) giving rise to the claim to which the
notice relates or that any such failure in fact gave rise to the liabilities,
damages, claims, costs, or expenses for which the other party seeks
indemnification under this Article 9; or






	 	(C)	 	That such party is otherwise required to provide
indemnification pursuant to Section 8.2, Section 9.1, or Section 9.2, as
applicable,






then such party will have the right to initiate the dispute resolution mechanism set forth
in Article 10, in which case the dispute will be finally resolved as provided in Article
10. In such case, however, pending final resolution of the disputed item, the parties will
proceed as if the party receiving the indemnification notice had in fact made a
misrepresentation, breached a warranty, or failed to perform an obligation to be performed
on the part of that party under this Purchase Agreement and as if such act or failure in
fact gave rise to the liabilities, damages, claims, costs, or expenses for which the other
party seeks indemnification under this Article 9.




	9.5	 	Quantum Limitation on Indemnification. Notwithstanding the provisions of Section 9.2 and
subject to the last sentence of this Section 9.5, Ferro will not be obligated to indemnify or
defend Novolyte, or hold Novolyte harmless, pursuant to Section 9.2 (A), (B) or (C) from or
against any liability, damage, claim, cost, or expense (including attorneys’ fees) arising out
of a misrepresentation or breach of any representations and warranties made by Ferro:






	 	(A)	 	with respect to any individual claim for which the Actual
Amount of such claim is less than $50,000 (the “Mini-Basket”);






	 	(B)	 	unless and until the aggregate Actual Amount for all claims
equal to or in excess of the Mini-Basket is collectively greater than $700,000,
whereupon Ferro shall indemnify Novolyte for all liabilities, damages, claims,
costs and expenses (including attorneys’ fees) from the first dollar; and






	 	(C)	 	for an aggregate amount in excess of Six Million Dollars
($6,000,000).






Subject to the last sentence of this Section 9.5, the limitations set forth in clauses (A),
(B) and (C) above will not apply to any claims: (i) arising out of a breach of any
misrepresentation set forth in Sections 7.1, 7.2(C)(1), 7.2(D)(2), 7.2(F)(1), 7.2(G)(1),
7.2(H)(1), or 7.2(S)(1) (collectively, the “Fundamental Representations”), (ii) arising out
of a breach of any misrepresentation set forth in Sections 7.2(A) or 7.2(T)(2), or (iii)
which are based on any fraud, willful misconduct or intentional misrepresentation or
omission. In addition, Ferro’s liability arising out of a breach of any representation set
forth in Section 7.2 with regard to any Environmental Matter or Environmental Condition
that is not an Identified Environmental Matter or pursuant to Sections 9.2 (B), (C), (D) or
(E) with regard to any Environmental Matter or Environmental Condition that is not an
Identified Environmental Matter, will be subject to the quantum and time limitations set
forth in Article 8 and not this Section 9.5 or Section 9.6. For the avoidance of doubt,
Ferro’s maximum liability for any environmental matter that is not an Identified
Environmental Matter, regardless of the basis for the claim, is Twelve Million Dollars
($12,000,000).




	9.6	 	Time Limitation on Indemnification. Notwithstanding the provisions of Section 9.2 and
subject to the last sentence of this Section 9.6, Ferro will not be obligated to indemnify or
defend Novolyte, or hold Novolyte harmless, from or against any liability, damage, claim,
cost, or expense (including attorneys’ fees) arising out of a misrepresentation or breach of
warranty by Ferro pursuant to Sections 9.2 (A), (B) or (C), and any cause of action based
thereupon shall expire and terminate, unless Novolyte delivers to Ferro notice and a detailed
explanation of the alleged breach on or before 5:00 p.m. (Eastern Time) –






	 	(A)	 	In the case of claims by Novolyte for misrepresentations or
breaches of any warranties under Section 7.2(L) (Employees and Employee
Benefits) sixty (60) days after expiration of the applicable statutes of
limitation periods for such matter, including any tolling thereof;






	 	(B)	 	In the case of claims by Novolyte arising out of a breach of
any representation set forth in Section 7.2 (including Section 7.2(M)
(Compliance with Environmental Laws)) or pursuant to Sections 9.2(B), (C), (D)
or (E) in each case with regard to any Environmental Matter or Environmental
Condition that is not an Identified Environmental Matter, pursuant to the time
limitations set forth in Section 8.2(B)(4);






	 	(C)	 	In the case of claims by Novolyte for misrepresentations or
breaches of any warranties under Section 7.2(P) (Taxes) the greater of (i) six
years after the Closing Date and (ii) ninety (90) days after expiration of the
applicable statutes of limitation periods, including any tolling thereof;






	 	(D)	 	There shall be no limitation on the time period in which
Novolyte may assert a right for indemnification with respect to any liability,
damage, claim, cost, or expense (including reasonable attorneys’ fees) that
arises from fraud, willful misconduct or intentional misrepresentation or
omission on the part of Ferro, Ferro Suzhou or any of their respective
Affiliates or that arises from a breach of any Fundamental Representation or a
breach of Section 7.2(A) or Section 7.2(U)(B) or in respect of claim for
indemnification pursuant to Section 9.2(E); and






	 	(E)	 	In the case of any other claim indemnifiable pursuant to
Section 9.2 (A), (B) or (C), on the date that is eighteen (18) months after the
Closing Date.






	9.7	 	Actual Amount. For purposes of the parties’ respective obligations under Sections 8.2, 9.1
and 9.2, in computing the “Actual Amount” of any liability, damage, claim, loss, cost, or
expense, the following principles will apply:






	 	(A)	 	The amount will be reduced to give full effect to any provision
or reserve on the books of the Fine Chemicals Business as of the Closing with
respect to the particular item or category of items out of which the
misrepresentation, breach, or non-performance in question arose;






	 	(B)	 	The amount will be reduced to give full effect to any insurance
recoveries the indemnified party actually receives under insurance policies as
a consequence of the fact, condition, or circumstance giving rise to the
misrepresentation, breach, or non-performance in question;






	 	(C)	 	The amount will be reduced to give full effect to any
indemnity, contractual, or non-contractual recoveries the indemnified party
actually receives as a consequence of the fact, condition, or circumstance
giving rise to the misrepresentation, breach, or non-performance in question;






	 	(D)	 	The amount will not be reduced to give any effect to any net
reduction in Tax liability or other Tax benefit the indemnified party enjoys or
is otherwise entitled to receive as a consequence of fact, condition, or
circumstance giving rise to the misrepresentation, breach, or non-performance
in question;






	 	(E)	 	The amount will be reduced to give full effect to any increase
in the amount of the liability, damage, claim, loss, cost, or expense in
question caused by any change in law after Closing; and






	 	(F)	 	Except in the case of claims by unaffiliated third parties, the
amount will not include any consequential, indirect, multiple of earnings, lost
profits, special, punitive or exemplary damages.






	9.8	 	Materiality. For purposes of determining whether any representation, warranty or covenant
has been breached and the amount of any liability, damage, claim, loss, cost, or expense that
is the subject matter of a claim for indemnification hereunder and except with regard to a
Material Event, each representation and warranty contained in this Purchase Agreement shall be
read without regard and without giving effect to any materiality, material adverse change, or
other similar qualification contained in such representation or warranty.






	9.9	 	Exclusive Remedies. Except as otherwise described in Section 2.7(D) and in Article 8, the
remedies provided in this Article 9 will be the parties’ exclusive remedies for claims arising
out of or resulting from any misrepresentation, breach of warranty, breach of covenant, breach
of undertaking, or non-performance any obligation to be performed on the part of either party
under this Purchase Agreement and the Other Agreements.






	9.10	 	Indemnity Payments. Each of Ferro and Novolyte will treat indemnity payments under this
Article 9 in accordance with applicable law.





Article 10 — - Dispute Resolution



If the parties ever have a dispute involving their respective rights and obligations under this
Purchase Agreement or any of the Other Agreements (other than with respect to the determination of
the amount of the Adjustment), then the parties will resolve such dispute as follows:




	10.1	 	Dispute Notice. Either Novolyte or Ferro may at any time deliver to the other a written
dispute notice setting forth a brief description of the issues for which such notice initiates
the dispute resolution mechanism set forth in this Article 10. Such dispute notice shall also
specify the provision or provisions of this Purchase Agreement and the facts or circumstances
that are the subject matter of the dispute.






	10.2	 	Informal Negotiations. During the 30-day period following delivery of a dispute notice
described in Section 10.1, the parties will cause their representatives to meet and seek to
resolve the disputed items cordially through informal negotiations






	10.3	 	Dispute Resolution Proceedings. If representatives of the parties are unable to resolve
disputed items through the informal negotiations described in this Section 10.3, then within
15 days after the informal negotiation period the parties will refer the disputed issues to a
dispute resolution panel for final resolution as follows:






	 	(A)	 	Designation of Representatives. Within seven (7) days after such informal
negotiation period, Novolyte and Ferro will each designate one representative to serve
on the dispute resolution panel. (If either party fails or refuses to designate a
representative, then the other party will be entitled to have a representative
appointed for such party by the CPR Institute.)






	 	(B)	 	Selection of Neutral. Promptly after they have been designated, the designated
representatives will meet and select a neutral person (the “Neutral”) to serve as the
third member of the dispute resolution panel. If the designated representatives of
parties cannot agree on a Neutral, then either representative may request the CPR
Institute to select the Neutral.






	 	(C)	 	Procedures and Process. At the time the matter is referred to the dispute
resolution panel, Novolyte and Ferro will jointly establish the procedures to be
followed with respect to the presentation of the parties’ respective positions and the
process by which the dispute resolution panel will reach and render its decision on the
disputed issues. Such procedures and processes will, at a minimum, assure that –






	 	(1)	 	Each party will have the right to submit evidence to the
dispute resolution panel;






	 	(2)	 	Each party will have the right to present a written statement
concerning that party’s position with respect to the disputed item; and






	 	(3)	 	Before reaching a decision concerning the disputed item, the
dispute resolution panel will convene a hearing at which both parties may be
represented.






If Novolyte and Ferro cannot agree on such procedures and processes, then
the Neutral will establish such procedures and process which will, in all
events, be consistent with the foregoing.




	 	(D)	 	Decision. The dispute resolution panel will act by majority vote. The dispute
resolution panel will base its decision on applicable provisions of this Purchase
Agreement or, if the provisions of this Purchase Agreement do not resolve the matter,
on general principles of substantive Ohio law. (The dispute resolution panel may, if
it so desires, seek the opinion of an attorney licensed to practice law in the State of
Ohio on any matter of substantive Ohio law on which the panel desires clarification.)
If the dispute resolution panel concludes that one party did not proceed in good faith
in connection with the prosecution or defense of a disputed claim, then the panel will
have the power, if it so chooses, to award the other party its costs and expenses in
connection with the dispute resolution proceedings; otherwise, each party will be
solely responsible for its own costs and one-half of the dispute resolution panel’s
fees and costs in connection with such proceedings.






	10.4	 	Equitable Relief. Notwithstanding any other provision of this Article 10, either party may
seek from a court of competent jurisdiction interim injunctive relief in order to maintain the
status quo or protect such party’s rights under this Purchase Agreement pending resolution of
a dispute pursuant to this Article 10.






	10.5	 	Binding Effect. The decisions of the dispute resolution panel under this Article 10 will be
binding on both Ferro and Novolyte and will be neither appealable, contestable, or subject to
collateral attack by Ferro or Novolyte.





Article 11 — - Amendment, Waiver and Termination




	11.1	 	Amendment. The parties may amend this Purchase Agreement at any time before the Closing, but
only by written instrument executed by both parties.






	11.2	 	Waiver. Either party may at any time waive compliance by the other with any undertakings or
conditions contained in this Purchase Agreement but only by written instrument executed by the
party waiving such compliance. No such waiver, however, shall be deemed to constitute the
waiver of any such undertaking or condition in any other circumstance or the waiver of any
other undertaking or condition.






	11.3	 	Termination. This Agreement may be terminated at any time before the Closing:






	 	(A)	 	By the mutual written consent of Ferro and Novolyte;






	 	(B)	 	By Novolyte, if, by December 31, 2008 (the “Outside Date”), the
conditions set forth in Section 4.1 shall not have been satisfied, complied
with or performed (unless such failure of satisfaction, compliance or
performance is the result, directly or indirectly, of Novolyte’s failure to
perform any of its obligations under this Agreement that are required to be
performed at or before Closing)), and Novolyte shall not have waived such
failure of satisfaction, compliance or performance;






	 	(C)	 	By Ferro, if, by the Outside Date, the conditions set forth in
Section 4.2 shall not have been satisfied, complied with or performed (unless
such failure of satisfaction, compliance or performance is the result, directly
or indirectly, of Ferro’s failure to perform any of its obligations under this
Agreement that are required to be performed at or before Closing, and Ferro
shall not have waived such failure of satisfaction, compliance or performance;






	 	(D)	 	By Novolyte, if Ferro has breached or failed to comply with its
warranties, representations or obligations under this Purchase Agreement such
that the conditions set forth in Section 4.1 would not reasonably be expected
to be satisfied, and such breach or failure to comply shall not have been cured
within a period of 15 calendar days after Novolyte shall have given written
notice to Ferro of such breach or failure to comply; or






	 	(E)	 	By Ferro, if Novolyte has breached or failed to comply with its
warranties, representations or obligations under this Agreement such that the
conditions set forth in Section 4.2 would not reasonably be expected to be
satisfied, and such breach or failure to comply shall not have been cured
within a period of 15 calendar days after Ferro shall have given written notice
to Novolyte of such breach or failure to comply.






	11.4	 	Effect of Termination. Termination of this Agreement pursuant to Section 11.3 shall
terminate all liabilities and obligations of the parties without liability (except those
arising under this Section 11.4 and 12.2), provided, however, that nothing in this Section
11.4 shall relieve or limit the liability hereunder of any party (the “Defaulting Party”) to
the other party on account of fraud or a willful breach of a covenant contained herein by the
Defaulting Party. In the case of such fraud or willful breach, in addition to any damages for
which the Defaulting Party may be liable, the Defaulting Party shall reimburse the other party
for any expenses incurred by such party in order to enforce its or their rights under this
Agreement (including reasonable attorney’s fees and expenses).





Article 12 — - Miscellaneous




	12.1	 	Severability. If any provision of this Purchase Agreement shall finally be determined to be
unlawful, then such provision will be deemed to be severed from this Purchase Agreement and
replaced by a lawful provision which carries out, as closely as possible, the intention of the
parties and preserves the economic bargain contemplated by this Purchase Agreement and, in
such case, each and every other provision of this Purchase Agreement will remain in full force
and effect.






	12.2	 	Costs and Expenses. The parties will be responsible for the following costs and expenses
arising out of the transactions contemplated by this Purchase Agreement as follows:






	 	(A)	 	Ferro will be solely responsible for the fees and expenses of
KeyBanc Capital Markets whether or not the transactions are consummated;






	 	(B)	 	Novolyte will be solely responsible for any filing fees that
may be required in connection with any necessary regulatory applications and
notifications; and






	 	(C)	 	Notwithstanding anything in this Agreement to the contrary,
except to the extent a Transfer Tax constitutes a Retained Liability, if the
transactions are consummated, Ferro and Novolyte will be responsible for one
half of any Transfer Taxes.






Otherwise, each party will bear its own expenses incurred in connection with this Purchase
Agreement and the transactions contemplated by this Purchase Agreement, whether or not the
transactions are consummated.




	12.3	 	Notices. All notices, requests and other communications under this Purchase Agreement shall
be in writing and shall be deemed to have been duly given at the time of receipt if delivered
by hand or communicated by facsimile transmission, or, if mailed, three days after mailing
registered or certified mail, return receipt requested, with postage prepaid:





	 	 	 	 	 
	If to Novolyte, to:
	 	Novolyte Technologies LP
	c/o Arsenal Capital Management LP
320 Park Avenue, 30th Floor
New York, NY 10022
	 	 	 	 
	Attention: John Televantos
	 	 	 	 
	Facsimile:
	 	 	1.212.771.1718	 
	With a copy (which shall not constitute notice to Novolyte) to:

	 
	 	Proskauer Rose LLP
	1585 Broadway
New York, NY 10036
	 	 	 	 
	Attention: Daniel J. Eisner
	 	 	 	 
	Facsimile:
	 	 	1.212.969.2900	 
	If to Ferro, to:
	 	Ferro Corporation
	1000 Lakeside Avenue
Cleveland, Ohio 44114
USA
	 	 	 	 
	Attention:
	 	General Counsel
	Facsimile:
	 	 	1.216.875.7275	 







Either party may change its notice address above to a different address by giving the other
party written notice of such change.




	12.4	 	Assignment. This Purchase Agreement will be binding upon and inure to the benefit of the
successors of the parties, but will not be assignable by any party without the prior written
consent of the other parties. Novolyte will have the right, however, if it so elects, to
assign all or an identified portion of its rights and delegate all or an identified portion of
its duties under this Purchase Agreement to a wholly-owned Affiliate of Novolyte or of
Novolyte’s parent if, at the time of such assignment and delegation, Novolyte provides Ferro
with an unconditional guarantee (the “Novolyte Guarantee”) in the form set forth on Appendix
S. In addition, and notwithstanding anything herein to the contrary, Novolyte shall have the
right to assign, in whole or in part, its rights with respect to indemnification in respect of
Environmental Matters to any purchaser of all or any portion of the Real Property so long as
such purchaser agrees in writing to be bound by the provisions of Section 8.2 with respect to
the Real Property to be purchased. Ferro hereby agrees that Novolyte may unilaterally grant a
security interest in its rights and interests hereunder to its lender(s), and Ferro will sign
a consent with respect thereto if so requested by Novolyte or its lender(s).






	12.5	 	No Third Parties. Except with regard to Ferro Suzhou and Ferro Belgium which are each an
express third party beneficiary of this Purchase Agreement, neither this Purchase Agreement
nor any provisions set forth in this Purchase Agreement is intended to, or shall, create any
rights in or confer any benefits upon any person other than the parties to this Purchase
Agreement.






	12.6	 	Incorporation by Reference. The Appendices to this Purchase Agreement and the Disclosure
Schedules constitute integral parts of this Purchase Agreement and are hereby incorporated
into this Purchase Agreement by this reference.






	12.7	 	Governing Law. This Purchase Agreement will be governed by and construed in accordance with
the internal substantive laws of the State of Ohio, except where the internal substantive laws
of another jurisdiction mandatorily apply.






	12.8	 	Bulk Sales. Novolyte hereby waives compliance by Ferro with the provisions of any so-called
“bulk sales” law or similar law requiring creditor notice of any jurisdiction.






	12.9	 	Counterparts. More than one counterpart of this Purchase Agreement may be executed by the
parties hereto, and each fully executed counterpart shall be deemed an original without
production of the others. Each counterpart may be delivered by means of electronic
transmission, including facsimile and pdf format, and such electronic transmission shall be
deemed an original.






	12.10	 	Complete Agreement. This Purchase Agreement sets forth the entire understanding of the
parties hereto with respect to the subject matter of this Purchase Agreement and supersedes
all prior letters of intent, agreements, undertakes, arrangements, communications,
representations, or warranties, whether oral or written, by any officer, employee, or
representative of either party relating thereto.






	12.11	 	Disclosure Schedules. The parties acknowledge and agree that the Disclosure Schedules may
include certain items and information solely for informational purposes and that the
disclosure of any matter in the Disclosure Schedules shall not be deemed to constitute an
acknowledgment by Ferro that the matter is required to be disclosed by the terms of this
Purchase Agreement or that the matter is material to the Fine Chemicals Business or otherwise.
Nothing in the Disclosure Schedules shall be adequate to disclose an exception to a
representation or warranty made in this Purchase Agreement except to the extent the Part
thereof identifies the exception and describes the facts. Without limiting the generality of
the foregoing, the mere listing (or inclusion of a copy) of a document or other item shall not
be adequate to disclose an exception to a representation or warranty made in this Purchase
Agreement, unless the representation or warranty has to do with the existence of the document
or other item itself. No exceptions to any representations or warranties disclosed on one
Part of the Disclosure Schedules shall constitute an exception to any other representations or
warranties made in this Purchase Agreement except to the extent the disclosure is clear in its
disclosure or cross-referenced in such other applicable Part.




4









To evidence their agreement as stated above, Novolyte Technologies LP, on one hand,
and Ferro Corporation, on the other hand, have each caused their respective duly
authorized directors, officers, or attorneys to execute this Purchase Agreement as of September
29, 2008.



	 	 	 	 	 	 	 
	Novolyte Technologies LP
	 	Ferro Corporation
	By:

	 	/s/ Anthony Giorgio
	 	By:
	 	/s/ James F. Kirsch
	
 
	 	 
	 	 	 	 
	
 
	 	Name: Anthony Giorgio

Title: Authorized Signatory
	 	 	 	Name: James F. Kirsch

Title: Chairman and CEO






5




Definitions




The following terms identified with initial capital letters are defined in the following
Sections of the Purchase Agreement:



	 	 	 
	Term	 	Cross Reference
	Accounting Principles

	 	Section 2.7(A)
	 

	 	 
	Acquired Assets

	 	Section 2.2
	 

	 	 
	Acquired Competing Business

	 	Section 6.5(A)(4)
	 

	 	 
	Acquired Independence Woods Assets

	 	Section 2.2(A)
	 

	 	 
	Acquired Intellectual Property

	 	Section 2.2(A)
	 

	 	 
	Acquired Japanese Assets

	 	Section 2.2(A)
	 

	 	 
	Acquired Posnick Assets

	 	Section 2.2(A)
	 

	 	 
	Acquired Walton Hills Assets

	 	Section 2.2(A)
	 

	 	 
	Actual Amount

	 	Section 9.7
	 

	 	 
	Adjustment

	 	Section 2.6(C)
	 

	 	 
	Adjustment Operations

	 	Section 2.7
	 

	 	 
	Assumed Liabilities

	 	Section 2.4
	 

	 	 
	Claim

	 	Section 9.3(A)
	 

	 	 
	Claimant

	 	Section 9.3
	 

	 	 
	Closing

	 	Section 5.1
	 

	 	 
	Closing Date

	 	Section 5.2
	 

	 	 
	Closing Purchase Price

	 	Section 2.6
	 

	 	 
	Closing Statement

	 	Section 2.7(B)(2)
	 

	 	 
	Closing Time

	 	Section 5.2
	 

	 	 
	Closing Working Capital

	 	Section 2.7(F)
	 

	 	 
	Deeds

	 	Section 5.5(B)
	 

	 	 
	Defending Party

	 	Section 9.3(B)
	 

	 	 
	Disclosure Schedules

	 	Section 7.2
	 

	 	 
	Economic Remediation Plan

	 	Section 8.2(B)(2)(c)
	 

	 	 
	Employees

	 	Section 8.1(A)
	 

	 	 
	Escrow Agent

	 	Section 2.8(a)
	 

	 	 
	Escrow Agreement

	 	Section 2.8(a)
	 

	 	 
	Excluded Employees

	 	Section 8.1(A)
	 

	 	 
	Ferro

	 	Preamble
	 

	 	 
	Ferro Belgium

	 	Section 2.2(B)(9)
	 

	 	 
	Ferro Japan

	 	Section 2.2(A)(4)
	 

	 	 
	Ferro Suzhou

	 	Recital A
	 

	 	 
	Ferro Suzhou Employees

	 	Section 8.1(A)
	 

	 	 
	Ferro’s Employee Obligations

	 	Section 8.1
	 

	 	 
	Ferro’s Environmental Obligations

	 	Section 8.2
	 

	 	 
	Fine Chemicals Business

	 	Recital B
	 

	 	 
	Fine Chemicals Business Disclosure Schedule

	 	Section 7.2
	 

	 	 
	HSR Act

	 	Section 3.7(C)
	 

	 	 
	Identified Environmental Matter

	 	Section 8.2(A)
	 

	 	 
	Indemnitor

	 	Section 9.3
	 

	 	 
	Independence Woods Location

	 	Section 2.2(A)(3)
	 

	 	 
	Japanese Location

	 	Section 2.2(A)
	 

	 	 
	Legal Requirement(s)

	 	Section 7.2(F)
	 

	 	 
	Neutral

	 	Section 10.3(B)
	 

	 	 
	New Establishment Costs

	 	Section 6.5(B)
	 

	 	 
	Non-Compete Business

	 	Section 6.5
	 

	 	 
	Novolyte

	 	Preamble
	 

	 	 
	Novolyte’s Employee Obligations

	 	Section 8.1
	 

	 	 
	Novolyte’s Environmental Obligations

	 	Section 8.2
	 

	 	 
	Novolyte’s Financing Plan

	 	Section 7.3(G)
	 

	 	 
	Other Agreements

	 	Section 3.4
	 

	 	 
	P.R.C.

	 	Recital A
	 

	 	 
	Posnick Center Location

	 	Section 2.2(A)(2)
	 

	 	 
	Preliminary Working Capital Statement

	 	Section 2.7(A)
	 

	 	 
	Products

	 	Recital B
	 

	 	 
	Purchase Agreement

	 	Preamble
	 

	 	 
	Purchase Price

	 	Section 2.6
	 

	 	 
	Regulations

	 	Section 3.7(C)
	 

	 	 
	Remediation Plan

	 	Section 8.2(B)(2)(c)
	 

	 	 
	Retained Assets

	 	Section 2.3
	 

	 	 
	Retained Liabilities

	 	Section 2.5
	 

	 	 
	SIP Commerce Authority

	 	Section 3.7
	 

	 	 
	SIP AIC

	 	Section 3.7
	 

	 	 
	Specified Acquired Assets

	 	Section 2.2
	 

	 	 
	Suzhou Equity Closing

	 	Section 5.1
	 

	 	 
	Suzhou Equity Interest

	 	Recital A
	 

	 	 
	Suzhou Equity Interest Purchase Price

Suzhou Equity Transfer

	 	Section 2.6

Recital D
	 

	 	 
	Suzhou Equity Transfer Agreement

	 	Recital D
	 

	 	 
	Suzhou Personal Property

	 	Section 6.5(B)
	 

	 	 
	Suzhou Personal Property Purchase Price

	 	Section 6.5(B)
	 

	 	 
	Title Company

	 	Section 5.5(A)
	 

	 	 
	Title Policies

	 	Section 5.5(A)
	 

	 	 
	Top Ten Customers

	 	Appendix (M), Part U
	 

	 	 
	Top Ten Suppliers

	 	Appendix (M), Part V
	 

	 	 
	Transferred Employees

	 	Section 8.1(A)
	 

	 	 
	Undisputed Adjustment

	 	Section 2.7(B)(2)
	 

	 	 
	Violation(s)

	 	Section 7.2(F)
	 

	 	 
	Walton Hills Location

	 	Section 2.2A
	 

	 	 
	Working Capital Collar

	 	Section 2.7(B)(5)
	 

	 	 
	Working Capital Collar Statement

	 	Section 2.7(A)(1)
	 

	 	 






6




In addition, the following terms have the meanings set forth below where used in the Purchase
Agreement and identified with initial capital letters:



	 	 	 
	Term	 	Meaning
	Acquired Business Records

	 	The Business Records held or used by the Baton Rouge

Location.
	Acquired Contracts

	 	The Contracts entered into by the Baton Rouge Location.
	Acquired Inventories

	 	The Inventories held or used by the Baton Rouge Location.
	Acquired Leases

	 	The Leases entered into by the Baton Rouge Location.
	Acquired Licenses

	 	The Licenses entered into by the Baton Rouge Location.
	Acquired Permits

	 	The Permits held or used by the Baton Rouge Location.
	Acquired Prepaid Items

	 	The Prepaid Items of the Baton Rouge Location.
	Acquired Real Property

	 	The Real Property located at 111 West Irene, Zachery,

Louisiana 70791.
	Acquired Tangible Personal Property

	 	The Tangible Personal Property held or used by the Baton

Rouge Location.
	Acquired Third-Party Claims

	 	The Third-Party Claims of the Baton Rouge Location.
	Acquired Trade Accounts Receivable

	 	The Trade Accounts Receivable of the Baton Rouge

Location.
	Affiliate

	 	With respect to a party, any other entity controlling,

controlled by, or under common control with such party.
	Assumed Trade Accounts Payable

	 	Trade Accounts Payable of the Baton Rouge Location, the

Walton Hills Location, the Suzhou Location, Ferro Japan,

and Ferro Belgium.
	Baton Rouge Location

	 	111 West Irene, Zachary, Louisiana 70791.
	Business Records

	 	The books and records of the Fine Chemicals Business not

protected by attorney-client privilege or otherwise

prohibited from disclosure by applicable law, including

all financial, operating, inventory, legal, personnel,

payroll, and customer records and all sales and

promotional literature, correspondence, and records held

or used by Ferro or Ferro Suzhou, as applicable,

primarily in their conduct of the Fine Chemicals

Business and by Ferro Belgium exclusively in its conduct

of the Fine Chemicals Business.
	Cash

	 	Cash and cash equivalent items held by or on behalf of

or on account of Ferro or Ferro Suzhou as of the

Closing, including certificates of deposit, time

deposits, marketable securities, and the proceeds of

accounts receivable paid on or before the Closing Date,

held or used by Ferro or Ferro Suzhou primarily in its

conduct of the Fine Chemicals Business.
	Contracts

	 	Collectively, the Purchase Contracts, the Sales

Contracts, and the Other Business Contracts.
	CPR Institute

	 	CPR Institute for Dispute Resolution, 366 Madison

Avenue, New York, New York.
	Default

	 	An occurrence which constitutes a breach, default,

violation or conflict, or a give any third party the

right to modify, terminate, cancel or accelerate any

obligation, under any contract, order, or other

commitment, after the expiration of any grace period

provided without cure.
	Employee Benefit Plan

	 	Any –
	
 
	 	(1) Employee benefit plan within the meaning of Section

3(3) of ERISA,
	
 
	 	(2) Profit sharing, bonus, compensation, stock purchase,

stock option, employment, termination, severance,

retention or other similar plan, agreement or

arrangement, and
	
 
	 	(3) Hospitalization, medical, life, or supplemental

unemployment benefits plan, program, agreement or

arrangement, which are or have been sponsored,

maintained or contributed to or required to be

contributed to by Ferro or Ferro Suzhou, any of its

subsidiaries or any ERISA Affiliate for the benefit of

any former or current consultant, employee, officer or

director of Ferro or Ferro Suzhou, any of its

subsidiaries or any ERISA Affiliate, whether formal or

informal and whether legally binding or not.
	ERISA

	 	United States Employee Retirement Income Security Act of

1974, as amended.
	ERISA Affiliate

	 	Any corporation or trade or business under common

control with Ferro or Ferro Suzhou as determined under

Section 414(b),(c),(m) or (o) of the Code.
	Encumbrance

	 	Any encumbrance or lien, including, without limitation,

any mortgage, judgment lien, materialman’s lien,

mechanic’s lien, security interest, encroachment,

easement, or other restriction.
	Environmental Condition

	 	An Environmental Matter for which investigation,

corrective action, remedial action or monitoring is

legally required under Environmental Laws or P.R.C.

Environmental Laws, as applicable.
	Environmental Laws

	 	Statutes, laws, including the common law, rules,

regulations, orders, decrees, standards, ordinances,

codes, and other governmental requirements that relate

to emissions, discharges, and releases of Hazardous

Materials into land, soil, ambient air, water, and

atmosphere, and/or the presence, generation, treatment,

storage, use, transportation, or disposal of Hazardous

Materials, including (in the case of operations of the

Fine Chemicals Business in the United States) –
	
 
	 	(1) The Comprehensive Environmental Response,

Compensation and Liability Act, 42 U.S.C. § 9601 et

seq., as amended;
	
 
	 	(2) The Solid Waste Disposal Act, 42 U.S.C. § 6901 et

seq., as amended;
	
 
	 	(3) The Clean Air Act, 42 U.S.C. § 7401 et seq., as

amended;
	
 
	 	(4) The Clean Water Act. 33 U.S.C. § 1251 et seq., as

amended;
	
 
	 	(5) The Hazardous Materials Transportation Act, 49

U.S.C. § 5101 et seq., as amend-ed;
	
 
	 	(6) The Toxic Substances Control Act, 15 U.S.C. §2601 et

seq., as amended; and
	
 
	 	(7) The Emergency Planning & Community Right-to-Know

Act, 42 U.S.C. § 11001 et seq., as amended;
	
 
	 	and comparable legislation in other jurisdictions

applicable to the Fine Chemicals Business, including the

P.R.C.
	Environmental Matter

	 	Any action, condition, or event giving rise to a legal

obligation under Environmental Laws or P.R.C.

Environmental Laws, as applicable, including as it may

be conducted under the ownership of Novolyte or its

successors.
	Foreign Plan

	 	Any Employee Benefit Plan maintained outside of the

United States.
	Fine Chemicals Business Condition

	 	The properties, assets, liabilities (fixed and

otherwise), and condition (financial and otherwise) of

the Fine Chemicals Business taken as a whole.
	Hazardous Materials

	 	Any material that is defined as “hazardous” or is

subject to regulation under an Environmental Law or

P.R.C. Environmental Law, including pollutants,

chemicals, contaminants, wastes, petroleum and petroleum

products, and other hazardous or toxic substances.
	Health and Safety Laws

	 	Statutes, laws (including the common law), rules,

regulations, orders, ordinances, codes, and other

governmental mandates and restrictions applicable to the

Fine Chemicals Business relating to the health and/or

safety of employees or others having business dealings

with the Fine Chemicals Business.
	Intellectual Property

	 	All intellectual property rights throughout the world

held or used by Ferro or Ferro Suzhou or their

Affiliates primarily in its conduct of the Fine

Chemicals Business, including, without limitation, all

rights consisting of, conferred by, or otherwise

relating to —
	
 
	 	(1) Patents and patent applications (including all

renewals, reissues, reexaminations, substitutions,

extensions, or modifications thereof);
	
 
	 	(2) Trade secrets, including without limitation,

know-how, inventions, computerized data and information,

custom software (not off the shelf), business records,

files and data, discoveries, formulae, compositions,

specifications, systems, prototypes, production

outlines, product designs, research and development

information, manufacturing information, processes and

techniques, testing and quality control processes and

techniques, drawings and customer lists;
	
 
	 	(3) Trademarks, service marks, logos and Internet domain

names, together with all goodwill associated therewith,

and applications, registrations and renewals therefor;
	
 
	 	(4) Copyrights, mask works, copyrightable works and

applications, registrations and renewals in connection

therewith;
	
 
	 	(5) Trade names; and
	
 
	 	(6) All actions and rights to sue at law or in equity

for past, present or future infringement or other

impairment of any of the foregoing, including the right

to receive all proceeds and damages therefrom;
	
 
	 	provided, however, such term will not include financial

data whether relating to the foregoing or not.
	International Transition Services Agreement

	 	An agreement to be dated as of the Closing Date between

Ferro and its affiliates and Novolyte relating to the

parties’ respective rights and obligations after the

closing of the Suzhou Equity Transfer with respect to

transition services to be provided by Ferro for the

benefit of Novolyte, the material terms of which are set

forth on Appendix X.
	Inventories

	 	Inventories, wherever located, including inventories of

raw materials, components, assemblies, subassemblies,

work-in-process, finished goods, replacement parts,

spare parts, operating supplies, and packaging held or

used by Ferro or Ferro Suzhou primarily in its conduct

of the Fine Chemicals Business, including at the Walton

Hills Location and the Baton Rouge Location, or by Ferro

Belgium or Ferro Japan exclusively in the conduct of the

Fine Chemicals Business.
	Leases

	 	Leases and similar contractual rights affording the

right to use or enjoy intangible property or property

rights arising primarily out of Ferro’s or Ferro

Suzhou’s conduct of the Fine Chemicals Business or

exclusively related to Ferro Belgium’s conduct of the

Fine Chemicals Business.
	Licenses

	 	Leases and similar rights affording the right to use or

enjoy intangible property or intangible property rights,

including software, arising primarily out of Ferro’s or

Ferro Suzhou’s conduct of the Fine Chemicals Business or

exclusively related to Ferro Belgium’s conduct of the

Fine Chemicals Business.
	Management and Transition Service

Agreement

	 	An agreement to be dated as of the Closing Date between

Ferro and Novolyte relating to the parties’ respective

rights and obligations after the Closing with respect to

operations of the Fine Chemicals Business located in

Suzhou, China until the closing of the Suzhou Equity

Transfer Agreement, such agreement to be in the form of

Appendix V.
	Material Event

	 	Any condition, circumstance, occurrence, or other event,

which, individually or collectively, has had or is

reasonably likely to have a material and adverse effect

on the Fine Chemicals Business Condition, including any

of such event resulting from any —
	
 
	 	(1) Act of God, flood, windstorm, earth-quake, accident,

fire, explosion, casualty, riot, requisition or taking

of property by governmental authority, war, terrorism,

embargo, or other event outside Ferro’s or Ferro

Suzhou’s control;
	
 
	 	(2) Termination, cancellation, or substantial

modification of any Contract, Lease, License, or Permit;
	
 
	 	(3) Default by Ferro, Ferro Suzhou or Ferro Belgium

under any Contract, Lease, License, or Permit; or
	
 
	 	(4) Filing (whether voluntary or involuntary) of a

petition in bankruptcy or commencement of any other

action involving creditors’ rights or debtors’ remedies

affecting Ferro or Ferro Suzhou.
	Other Business Contracts

	 	Contracts, other than Purchase Contracts and Sales

Contracts, to which Ferro, Ferro Suzhou or Ferro Belgium

is a party or by which Ferro, Ferro Suzhou or Ferro

Belgium is bound which, in the case of Ferro and Ferro

Suzhou arose primarily out of Ferro’s or Ferro Suzhou’s

conduct of the Fine Chemicals Business or in the case of

Ferro Belgium is exclusively related to Ferro Belgium’s

conduct of the Fine Chemicals Business.
	Owns or Ownership

	 	Such ownership as confers upon the party or person

having it good and marketable title to and control over

the thing or right owned, free and clear of any and all

Encumbrances except Permitted Encumbrances.
	PAD (Baton Rouge) Tolling Agreement

	 	An agreement to be dated as of the Closing Date between

Ferro and Novolyte relating to the parties’ respective

rights and obligations after the Closing with respect to

tolling and transition services to be provided by

Novolyte for the benefit of Ferro, such agreement to be

in the form of Appendix T.
	Permits

	 	Permits, licenses, approvals, and qualifications issued

by any government or governmental unit, agency, board,

body, or instrumentality and all applications for such

items held or used by Ferro or Ferro Suzhou primarily in

its conduct of the Fine Chemicals Business.
	Permitted Encumbrances

	 	The following:
	
 
	 	(1) Liens for taxes and assessments accrued for the year

of Closing but not yet due and payable for which

adequate reserves have been established;
	
 
	 	(2) Liens arising as a matter of law in the ordinary

course of business (provided neither Ferro nor Ferro

Suzhou, as applicable, are delinquent in respect of the

obligations secured by such liens and the total amount

of such liens does not exceed $25,000);
	
 
	 	(3) Such other imperfections of title and other

Encumbrances which singly or taken together, do not and

are not likely to have a material adverse effect on the

Fine Chemicals Business Condition, including applicable

zoning and building laws and regulations; and
	
 
	 	(4) With respect to the Real Property located in the

United States, any Encumbrance which is set forth as an

exception on the Title Commitment or disclosed on the

Existing Survey or which is disclosed on the Updated

Survey, if obtained by Novolyte.
	P.R.C. Environmental Laws

	 	Statutes, laws, including the common law, regulations,

orders, decrees, standards, ordinances, codes and other

governmental requirements of P.R.C. that relate to

emissions, discharges, and releases of Hazardous

Materials into land, soil, ambient air, water, and

atmosphere and/or the presence, generation, treatment,

storage, use, transportation or disposal of Hazardous

Materials.
	P.R.C. Safety Laws

	 	Laws, regulations. rules or other governmental

requirements of P.R.C. that are applicable to the Fine

Chemicals Business of Ferro Suzhou relating to the

safety production, including without limitation to laws,

regulations and rules relating to the production,

storage, use, sales and transportation of hazardous

materials (as listed in the P.R.C. Catalogue of

Hazardous Chemicals).
	Pre-Closing Straddle Periods

	 	The portion of any Straddle Period ending on the Closing

Date. The amount of any Taxes for a Pre-Closing

Straddle Period shall be determined (a) in the case of

Taxes imposed upon or measured by income or receipts,

based on an interim closing of the books as of the close

of business on the Closing Date and (b) with respect to

all other Taxes (including those imposed on a periodic

basis or measured by the level of any item), determined

based on the amount of such Taxes for the entire

Straddle Period multiplied by a fraction, the numerator

of which is the number of calendar days in the

Pre-Closing Straddle Period and the denominator of which

is the number of calendar days in the entire Straddle

Period.
	Pre-Closing Tax Liabilities

	 	Any liability or obligation (whether known or unknown,

whether asserted or unasserted, whether absolute or

contingent, whether accrued or unaccrued, whether

liquidated or unliquidated, and whether due or to become

due and regardless of when asserted) for Taxes, with

respect to any Pre-Closing Tax Periods and any

Pre-Closing Straddle Periods.
	Pre-Closing Tax Periods

	 	All taxable periods ending on or before the Closing Date.
	Prepaid Items

	 	Prepaid and similar items, including prepaid expenses,

deferred charges, advance payments, and other prepaid

items, in each case, arising primarily out of Ferro’s or

Ferro Suzhou’s conduct of the Fine Chemicals Business.
	Prescribed Rate

	 	The rate of interest publicly announced by National City

Bank, Cleveland, Ohio (or any successor entity, if

applicable),from time to time as its prime or base rate

for U.S. Dollar loans.
	Products

	 	Those products specifically listed on Appendix A-1

hereto.
	Purchase Contracts

	 	Orders, contracts, and commitments for the purchase of

goods and/or services, such items relating to the

purchase of capital, tooling, products, supplies, and

software arising primarily out of Ferro’s of Ferro

Suzhou’s conduct of the Fine Chemicals Business or

exclusively related to Ferro Belgium’s conduct of the

Fine Chemicals Business.
	Real Property

	 	The following real properties, including all owned land,

buildings, improvements, fixtures, and appurtenances

thereto:
	
 
	 	(1) Land and buildings located at Ferro’s manufacturing

and office facility at 111 West Irene, Zachary,

Louisiana 70791; and
	
 
	 	(2) Buildings and land-use rights (and not land) located

at Ferro Suzhou’s manufacturing and office facility at

No. 15 Suhong East Road, Suzhou Industrial Park, Suzhou

City, Jiangsu Province, P.R.C.
	Sales Contracts

	 	Orders, contracts, commitments, and proposals for the

sale of Products, including such items relating to

repair, restoration, maintenance, preservation, and

similar operations arising primarily out of Ferro’s and

Ferro Suzhou’s conduct of the Fine Chemicals Business or

exclusively related to Ferro Belgium’s conduct of the

Fine Chemicals Business.
	Split-Off Transaction

	 	The transaction to divide the assets and liabilities of

the Fine Chemicals Business from the assets and

liabilities of Ferro’s businesses in the P.R.C. which

are not related to the Fine Chemicals Business, which

Split-Off Transaction will be deemed effective upon the

issuance of the new Business License of Ferro Suzhou by

SIP AIC reflecting the Split-off Transaction.
	Straddle Period

	 	Any taxable period that begins before but ends after the

Closing Date.
	Suzhou Location

	 	No. 15 Suhong East Road, Suzhou Industrial Park, Suzhou

City, Jiangsu Province, P.R.C.
	Tax and Taxes

	 	With respect to any person –
	
 
	 	(1) All federal, state, local, county, foreign and other

taxes, assessments or other government charges,

including, without limitation, any income, alternative

or add-on minimum tax, estimated gross income, gross

receipts, sales, use, ad valorem, value added, transfer,

capital stock franchise, profits, license, registration,

recording, documentary, intangibles, conveyancing,

gains, withholding, payroll, employment, social security

(or similar), unemployment, disability, excise,

severance, stamp, occupation, premium, property (real

and personal), environmental or windfall profit tax,

custom duty or other tax, governmental fee or other like

assessment, charge, or tax of any kind whatsoever,

together with any interest, penalty, addition to tax or

additional amount imposed by any Governmental Authority

responsible for the imposition of any such tax (domestic

or foreign) whether such Tax is disputed or not;
	
 
	 	(2) Liability for the payment of any amounts of the type

described in clause (1) above relating to any other

Person as a result of being party to any agreement to

indemnify such other person, being a successor or

transferee of such other person, or being a member of

the same affiliated, consolidated, combined, unitary or

other group with such other Person; or
	
 
	 	(3) Liability for the payment of any amounts of the type

described in clause (1) arising as a result of being (or

ceasing to be) a member of any affiliated group as

defined in §1504 of the Code, or any analogous combined,

consolidated or unitary group defined under state, local

or foreign income Tax law (or being included (or

required to be included) in any Tax Return relating

thereto)
	Tax Claim

	 	Any audit, examination or other administrative or court

proceeding, suit, dispute or other claim with respect to

any entity that comprises the Fine Chemicals Business

and attributable to a Pre-Closing Tax Period.
	Tax Return

	 	Any report, return, declaration, claim for refund or

other information or statement supplied or required to

be supplied by Ferro or Ferro Suzhou relating to Taxes

of the Fine Chemicals Business, including any schedules

or attachments thereto and any amendments thereof.
	Tangible Personal Property

	 	Tangible personal property (whether owned, leased, or

otherwise), including all machinery, equipment, tooling,

dies, molds, jigs, patterns, gauges, materials handling

equipment, furniture, office equipment, cars, trucks,

and other vehicles held or used by Ferro or Ferro Suzhou

primarily in its conduct of the Fine Chemicals Business.
	Third-Party Claims

	 	Causes of action, rights of action, and warranty and

product liability claims of Ferro or Ferro Suzhou

against other persons arising primarily out of Ferro’s

or Ferro Suzhou’s conduct of the Fine Chemicals

Business.
	Trade Accounts Payable

	 	Third-party notes, accounts, and other items payable

arising primarily out of Ferro’s or Ferro Suzhou’s

conduct of the Fine Chemicals Business, including at the

Baton Rouge Location and the Walton Hills Location, or

by Ferro Belgium and Ferro Japan exclusively in the

conduct of the Fine Chemicals Business, including all

such amounts owing under Contracts, Leases, and

Licenses.
	Trade Accounts Receivable

	 	Third-party notes and accounts receivable of customers

arising primarily out of Ferro’s or Ferro Suzhou’s

conduct of the Fine Chemicals Business, including at the

Walton Hills Location and the Baton Rouge Location, or

by Ferro Belgium and Ferro Japan exclusively in the

conduct of the Fine Chemicals Business, in selling

Products to such customers.
	Transfer Taxes

	 	All sales, use, gross receipts, transfer, withholding,

intangible, recordation, registration, documentary stamp

or similar Taxes or charges of any nature whatsoever

(including any penalties and interest), applicable to,

or resulting from, the purchase and sale of the Acquired

Assets contemplated by this Agreement.
	U.S. Transition Services Agreement

	 	An agreement to be dated as of the Closing Date between

Ferro and Novolyte relating to the parties’ respective

rights and obligations after the Closing with respect to

transition services to be provided by Ferro for the

benefit of Novolyte, the material terms of which are set

forth on Appendix W.
	Walton Hills Tolling Agreement

	 	An agreement to be dated as of the Closing Date between

Ferro and Novolyte relating to the parties’ respective

rights and obligations after the Closing with respect to

tolling and transition services to be provided by Ferro

for the benefit of Novolyte, such agreement to be in the

form of Appendix U.
	Working Capital

	 	The sum of –
	
 
	 	(1) Trade Accounts Receivable plus
	
 
	 	(2) Inventories minus
	
 
	 	(3) Trade Accounts Payable,
	
 
	 	for the Adjustment Operations and all as reflected on

the books of Ferro and its Affiliates in accordance with

the Accounting Principles, on a basis consistently

applied, as of a given date.






7




Suzhou Equity Transfer Agreement




This Suzhou Equity Transfer Agreement (this “Transfer Agreement”) is dated as of
[Month NN,] 200_, and is by and between:




Novolyte Technologies Limited (“Novolyte HK”), a limited company incorporated
under the laws of the Special Administrative Region of Hong Kong, P.R.C. (“Hong Kong”),




Novolyte Technologies LP, a Delaware limited partnership (“Parent” and together
with Novolyte HK, the “Buyer Parties”),



- and -





Ferro Corporation (“Ferro”), an Ohio corporation.



Recitals





	A.	 	Ferro owns 100% of the equity interests (the “Suzhou Equity Interest”) of Ferro (Suzhou)
Energy Storage Materials Co. Ltd. (“Ferro Suzhou”), a wholly-foreign owned enterprise
established under the applicable laws and regulations of the People’s Republic of China (the
“P.R.C.”), having its legal address at No. 15 Suhong East Road, Suzhou Industrial Park, Suzhou
City, Jiangsu Province, P.R.C.






	B.	 	Novolyte HK is a wholly-owned limited company of Parent.






	C.	 	Ferro Suzhou is engaged in the business of making electrolytes and related products and
providing services related to such products as specified in Ferro Suzhou’s business license
(the “Fine Chemicals Business”).






	D.	 	Novolyte HK desires to purchase from Ferro, and Ferro desires to sell to Novolyte HK, the
Suzhou Equity Interest pursuant to the terms and conditions of this Transfer Agreement.





Agreement




In consideration of the premises and the mutual covenants and agreements contained in this
Transfer Agreement, Ferro and Novolyte HK agree as follows:



Article 1 -



Defined Terms; The Equity Transfer




	1.1	 	Certain Defined Terms. Appendix A sets forth the definitions of certain terms used in this
Transfer Agreement. Those terms shall have the meanings set forth on Appendix A where used in
this Transfer Agreement and identified with initial capital letters.





1.2




	 	 	Transaction. On and subject to the terms and conditions of this Transfer Agreement, at the Suzhou
Equity Closing, Ferro shall sell, transfer, assign and deliver to Novolyte HK, and Novolyte HK
shall purchase, acquire and accept from Ferro, all of Ferro’s right, title and interest in the
Suzhou Equity Interest, free from all Encumbrances (the “Suzhou Equity Transfer”).





Article 2 -



Purchase Price




	2.1	 	Purchase Price. The aggregate purchase price for the Suzhou Equity Interest (the “Purchase
Price”) is Ten Million United States Dollars ($10,000,000) (US) (the “Cash Amount”). The
parties acknowledge and agree that simultaneous with the execution of this Transfer Agreement,
the Cash Amount has been transferred by either of the Buyer Parties to U.S. Bank, National
Association (the “Escrow Agent”) to be held by the Escrow Agent until the disbursement thereof
pursuant to the terms of an escrow agreement entered into by and among Parent, the Escrow
Agent and Ferro of even date herewith (the “Escrow Agreement”).






	2.2	 	Estimated Taxes. At the Suzhou Equity Closing, Ferro or its designee shall pay an amount
equivalent to any tax, registration fees, stamp duties, or other transfer fees, taxes or
imports applicable to the Suzhou Equity Transfer pursuant to applicable P.R.C. laws and
regulations (before final determination, the “Estimated Taxes” and after confirmation by the
applicable Governmental Entity, the “Actual Taxes”) determined by Ferro and Parent to be
payable as a result of the Suzhou Equity Transfer, including any taxes due pursuant to Article
[3] of the P.R.C. Enterprise Income Tax Law (effective as of January 1, 2008) and Article [6]
of the Detailed Implementation Rules thereunder (the “Estimated EI Tax”). Ferro shall make
such payment(s), including the Estimated EI Tax, to the relevant Governmental Entities and
shall provide Parent with a tax completion certificate and any other relevant documentation,
such as original receipts, within thirty (30) days after the date of such payment(s). If any
relevant Governmental Entity determines that the Estimated Taxes are greater than the Actual
Taxes, Ferro shall be entitled to a refund of the same. If any relevant Governmental Entity
determines that the Estimated Taxes are less than the Actual Taxes, Ferro shall promptly cause
the difference, together with any applicable interest and penalties, to be paid to the
relevant Governmental Entity.






	2.3	 	Payments at Suzhou Equity Closing. At the Suzhou Equity Closing, the Escrow Agent shall be
authorized the Buyer Parties to pay Ferro the Cash Amount in immediately available funds
pursuant to the written instructions of Ferro provided to the Escrow Agent at least five (5)
days before the Suzhou Equity Closing.





Article 3 -



Signing Deliveries




	3.1	 	Generally. Simultaneously with the execution and delivery of this Transfer Agreement, the
parties shall make the deliveries described in this Article III. Any agreement or document to
be delivered pursuant to this Transfer Agreement which is not attached to this Transfer
Agreement, must be in form and substance reasonably satisfactory to the party to which it is
being delivered, it being agreed that all documents, certificates, licenses, permits, and
approvals related to the Split-Off Transaction, incorporation and establishment of Ferro
Suzhou that have been filed or registered with or issued by the Approval Authority and the
Registration Authority and been made available by Ferro to Novolyte HK are satisfactory to
Novolyte HK and Parent.






	3.2	 	Ferro’s Deliveries. Ferro hereby delivers to Novolyte HK:






	 	(A)	 	A certified copy of the resolutions of Ferro’s Board of
Directors approving, Ferro’s execution, delivery and performance of this
Transfer Agreement and the other documentation referenced herein, the terms of
which shall be substantially in the form of Schedule 1 attached hereto;






	 	(B)	 	The application letter (the “Application Letter”) to be
submitted to the Approval Authority, completed and duly signed by an authorized
representative of Ferro and/or an authorized representative of Novolyte HK, as
required by the Approval Authority, the terms of which shall be substantially
in the form of Schedule 2 attached hereto;






	 	(C)	 	A copy of the Articles of Association of Ferro Suzhou, which is
attached hereto as Schedule 3;






	 	(D)	 	A copy of the current Certificate of Approval and the current
Business License of Ferro Suzhou, which is attached hereto as Schedule 4;






	 	(E)	 	A copy of the current standard employment contract of the
employees of Ferro Suzhou (together with a form addendum thereto), which is
attached hereto as Schedule 5; and






	 	(F)	 	A notification letter of the removal, effective as of the
Suzhou Equity Closing Date, of the directors, supervisor and legal
representative of Ferro Suzhou, the terms of which shall be substantially in
the form of Schedule 6 attached hereto.






	3.3	 	Novolyte HK and Parent Deliveries. Novolyte HK and Parent hereby deliver to Ferro:






	 	(A)	 	A certified copy of the resolutions of Parent and Novolyte HK’s
[board of directors] approving, without limitation, Novolyte HK’s and Parent’s
execution, delivery and performance of this Transfer Agreement and the other
documentation referenced herein, the terms of which shall be substantially in
the form of Schedule 7 attached hereto;






	 	(B)	 	An executed copy of the Amendment to the Articles of
Association of Ferro Suzhou, which among other things, shall change the name of
Ferro Suzhou as well as the legal representative thereof (the “Amended
Articles”), which Amended Articles shall be effective as of the Suzhou Equity
Closing Date, the terms of which shall be substantially in the form of Schedule
8 attached hereto;






	 	(C)	 	A letter of appointment of the new directors, supervisor and
legal representative of Ferro Suzhou, effective as of the Suzhou Equity Closing
Date, together with appropriate identification documents, photographs and
resumes of the new directors and legal representative of Ferro Suzhou;






	 	(D)	 	A certified and legalized copy of Novolyte HK’s Memorandum of
Articles and Articles of Association to show its good standing substantially in
the form required by the Approval Authority;






	 	(E)	 	A bank reference letter to show Novolyte HK as a new investor
financial standing substantially in the form required by the Approval
Authority.






	 	(F)	 	A letter of authorization dated the date hereof issued by
Novolyte HK to authorize Ferro and Ferro Suzhou to date and submit any of the
above documents and other undated documents signed by Novolyte HK and Ferro
Suzhou and take all related actions on their behalf in connection with the
Suzhou Equity Transfer and the subsequent application for the New Business
License; and






	 	(G)	 	All such other documentation required to be prepared or
delivered by Novolyte HK in connection with the approval of the Suzhou Equity
Transfer and this Transfer Agreement with the Approval Authority and the
subsequent application for the New Business License.





Article 4 -



Covenants




	4.1	 	Filings and Consents. Each of Ferro and Novolyte HK shall use all commercially reasonable
efforts to take, or cause to be taken, all appropriate action to do, or cause to be done, all
things necessary, proper or advisable under applicable law or otherwise to consummate and make
effective the transactions contemplated by this Transfer Agreement as promptly as practicable.
Subject to the foregoing, as soon as practicable after Ferro Suzhou has received the
Ancillary Certificates from the relevant governmental authorities following the Split-Off
Transaction (the exact timing to be determined by Ferro Suzhou), Ferro shall submit the
Application Letter and this Transfer Agreement, together with all other applicable
documentation, including the Amended Articles and all other documents attached hereto, to the
Chinese approval authority that originally granted its approval for the establishment of Ferro
Suzhou (the “Approval Authority”) for its examination and approval of the Suzhou Equity
Transfer. Promptly after approval of the Suzhou Equity Transfer by the Approval Authority and
receiving a notice from Ferro, Novolyte HK shall cause Ferro Suzhou to apply to the
Registration Authority for a new business license for Ferro Suzhou, which new business license
shall have the same business scope as the current business license of Ferro Suzhou (the “New
Business License”), and hereby also authorizes Ferro to date and make such application and
take all related actions on its and Ferro Suzhou’s behalf in connection therewith.






	4.2	 	Further Assurances. Each of Ferro and Novolyte HK agree that each will execute and deliver
any and all documents in addition to those expressly provided for herein and will take all
actions (and cause their affiliated entities, personnel and Ferro Suzhou to do the same) that
may be necessary or appropriate to effect the provisions of this Transfer Agreement and each
of the other agreements and instruments delivered by them in connection herewith and
therewith, including the Chinese version of this Transfer Agreement and any such other
agreements and instruments as may be required by the Approval Authority.





Article 5 -



Closing of Equity Transfer




	5.1	 	Closing. The closing of the transactions contemplated by this Transfer Agreement (the
“Suzhou Equity Closing”) shall be held after the conditions set forth in Sections 5.2, 5.3 and
5.4 are satisfied or waived by the appropriate party or such later date mutually agreed upon
in writing by the parties. The date on which the Suzhou Equity Closing takes place and the
Suzhou Equity Transfer is effective is referred to in this Transfer Agreement as the “Suzhou
Equity Closing Date.” The conditions and deliveries described in Sections 5.2, 5.3 and 5.4
hereof shall be mutually interdependent and shall be regarded as occurring simultaneously,
and, notwithstanding any other provisions of this Transfer Agreement, no such condition or
delivery shall become effective or shall be deemed to have occurred until all of the other
conditions and deliveries provided for in Section 5.2, Section 5.3 and Section 5.4 shall also
have occurred or have been waived by the appropriate party.






	5.2	 	Mutual Conditions. The respective obligations of Novolyte HK and Parent on the one hand, and
Ferro on the other hand, to consummate the transactions contemplated by this Transfer
Agreement shall be subject to the fulfillment, at or before the Suzhou Equity Closing, of each
of the following conditions, any of which may, to the extent permitted by applicable law, be
waived in writing by either Novolyte HK or Parent on the one hand, or Ferro on the other hand,
in its sole discretion (provided that such waiver shall only be effective against such party):






	 	(A)	 	No Governmental Entity shall have enacted, issued, promulgated
or enforced any statute, rule, regulation, executive order, decree, judgment,
preliminary or permanent injunction or other order that is in effect and that
prohibits, enjoins or otherwise restrains the Suzhou Equity Transfer and no
such action shall be threatened or pending.






	 	(B)	 	There shall not have been issued and in effect, or threatened
or pending, any injunction, action, suit or similar legal order or other
proceeding seeking or threatening to prohibiting or restraining or any action
by any Governmental Entity seeking to enjoin the consummation of any of the
transactions contemplated in this Transfer Agreement.






	 	(C)	 	The Approval Authority shall have approved the Suzhou Equity
Transfer pursuant to the terms of this Transfer Agreement and shall have issued
to Ferro a certificate evidencing approval of the Suzhou Equity Transfer.






	 	(D)	 	The New Business License shall have been issued to Ferro
Suzhou.






	5.3	 	Conditions to Ferro’s Obligations. The obligation of Ferro to consummate the transactions
contemplated by this Transfer Agreement shall be subject to the fulfillment, at or before the
Suzhou Equity Closing, of each of the following conditions, any of which may be waived in
writing by Ferro, in its sole discretion:






	 	(A)	 	All of the representations and warranties of Novolyte HK
contained herein are true, accurate, and complete in all material respects as
of the date hereof and are true, accurate, and complete in all material
respects as of the Suzhou Equity Closing (as if such representations and
warranties had been made anew as of the Suzhou Equity Closing except with
respect to the effect of transactions contemplated or permitted hereby).






	 	(B)	 	Ferro shall have received a certificate (dated the Suzhou
Equity Closing Date) from authorized directors and/or officers of Novolyte HK
certifying that the condition set forth in Section 5.3(A) has been satisfied as
of the Closing Date.






	5.4	 	Conditions to Novolyte HK’s and Parent’s Obligations. The obligation of Novolyte HK and
Parent to consummate the transactions contemplated by this Transfer Agreement shall be subject
to the fulfillment, at or before the Suzhou Equity Closing, of each of the following
conditions, any of which may be waived in writing by Novolyte HK and Parent, in their sole
discretion:






	 	(A)	 	Ferro Suzhou shall have obtained all other permits, licenses,
approvals and qualifications issued by any Governmental Entity necessary for
Ferro Suzhou to operate as a stand alone entity immediately following the
Suzhou Equity Closing, except where the failure to obtain any such permits,
licenses, approvals and qualifications would not reasonably be expected to have
a material adverse affect on the business of Ferro Suzhou, and expressly
excluding from such determination, a safety production license, tax and customs
registrations required after the Suzhou Equity Closing and items related
thereto.






	 	(B)	 	Ferro shall have procured the resignation, effective as of the
Suzhou Equity Closing Date, of all of the directors, supervisor and the legal
representative of Ferro Suzhou appointed by Ferro, and shall have delivered to
Novolyte HK and Parent original copies of the same, together with a general
release from liability of Ferro Suzhou by such directors and the legal
representative, a form of which is attached hereto as Schedule 9






	 	(C)	 	Novolyte HK shall have received a certificate (dated the Suzhou
Equity Closing Date) from authorized directors and/or officers of Ferro
certifying that the conditions set forth in Sections 5.4(A) and (B) have been
satisfied as of the Closing Date.





Article 6 -



Representations and Warranties



6.1 Ferro’s Representations and Warranties. Ferro represents and warrants to Novolyte HK and
Parent as follows:




	 	(A)	 	Organization and Existence. Ferro is a corporation duly
organized, validly existing, and in good standing under the laws of the State
of Ohio and Ferro Suzhou is a wholly-owned foreign enterprise organized and
existing under the laws of the P.R.C.






	 	(B)	 	Capitalization of Ferro Suzhou. Ferro Suzhou has a total
investment of $8,032,000 (U.S.) and registered capital of $4,016,000 (U.S.) (to
be updated as may be applicable at the Suzhou Equity Closing), all of which is
owned by Ferro. The Suzhou Equity Interest has been duly issued, fully paid,
and is nonassessable. Neither Ferro nor Ferro Suzhou has issued or granted to
any person any option, warrant, conversion right, or other right, interest or
benefit of any kind to acquire any other equity capital of Ferro Suzhou.






	 	(C)	 	Ownership of the Suzhou Equity Interest. Ferro owns all of the
issued and outstanding equity interests of Ferro Suzhou free of Encumbrances.






	 	(D)	 	Power and Authority. Ferro has full power and authority under
its constitutive documents and the laws of the State of Ohio to execute,
deliver, and perform this Transfer Agreement.






	 	(E)	 	Authorization. The execution, delivery, and performance of
this Transfer Agreement by Ferro has been duly authorized by all requisite
corporate action on the part of Ferro.






	 	(F)	 	Binding Effect. This Transfer Agreement is a valid, binding,
and legal obligation of Ferro.






	 	(G)	 	No Default. Neither the execution and delivery of this
Transfer Agreement nor Ferro’s full performance of its obligations under this
Transfer Agreement will violate or breach, or otherwise constitute or give rise
to a Default under, the terms or provisions of Ferro’s constitutive documents
or of any material contract, commitment, or other obligation to which Ferro is
a party.






	 	(H)	 	Finders. With the sole exception of KeyBanc Capital Markets,
Ferro has not engaged and are not directly or indirectly obligated to any
person acting as a broker, finder, or similar capacity in connection with the
transactions contemplated by this Transfer Agreement.






	6.2	 	Novolyte HK’s and Parent’s Representations and Warranties. Novolyte HK and Parent represent
and warrant to Ferro as follows:






	 	(A)	 	Organization and Existence. Novolyte HK is a limited company
duly organized, validly existing and in good standing under the laws of Hong
Kong. Parent is a Delaware limited partnership, duly organized, validly
existing and in good standing under the laws of the State of Delaware.






	 	(B)	 	Power and Authority. Each of Parent and Novolyte HK has full
corporate and company power and authority, as the case may be, under its
respective constitutive documents and under the laws of Delaware and Hong Kong,
respectively, to execute, deliver, and perform this Transfer Agreement






	 	(C)	 	Authorization. The execution, delivery, and performance of
this Transfer Agreement has been duly authorized by all requisite limited
company and corporate actions, as the case may be, on the part of Novolyte HK
and Parent.






	 	(D)	 	Binding Effect. This Transfer Agreement is a valid, binding,
and legal obligation of each of Novolyte HK and Parent.






	 	(E)	 	No Default. Neither the execution and delivery of this
Transfer Agreement nor Novolyte HK’s and Parent’s full performance of its
obligations under this Transfer Agreement will violate or breach, or otherwise
constitute or give rise to a Default under, the terms or provisions of Novolyte
HK’s or Parent’s constitutive documents or of any material contract,
commitment, or other obligation to which Novolyte HK or Parent is a party.






	 	(F)	 	Finders. Neither Novolyte HK nor Parent has engaged and is not
directly or indirectly obligated to any person acting as a broker, finder, or
similar capacity in connection with the transactions contemplated by this
Transfer Agreement.





Article 7 -



Termination




	7.1	 	Termination. The parties may terminate this Transfer Agreement at any time before the Suzhou
Equity Closing, but only by written instrument signed by both parties. This Transfer
Agreement will terminate automatically, and without further action by either party (a) if the
Suzhou Equity Closing has not occurred by June 30, 2009 date, provided however, that if the
Approval Authority has already approved the transfer but Novolyte HK has not yet received the
New Business License, this Transfer Agreement may not be terminated notwithstanding that the
Suzhou Equity Closing has not occurred by such date, or (b) if either party has terminated the
Escrow Agreement dated of even date herewith between the parties pursuant to its terms.
Neither party shall have any liability to the other upon termination hereof or have any
continuing obligations to the other, except for any that are expressly stated to survive
termination.





Article 8 -



Miscellaneous




	8.1	 	Cooperation. Novolyte HK and Ferro will cooperate with each other, at the other party’s
request and expense, in furnishing information, testimony, and other assistance in connection
with any actions, proceedings, arrangements, and disputes with other persons or governmental
inquiries or investigations involving Ferro’s conduct of the Fine Chemicals Business or the
transactions contemplated by this Transfer Agreement.






	8.2	 	Severability. If any provision of this Transfer Agreement shall finally be determined to be
unlawful, then such provision will be deemed to be severed from this Transfer Agreement and
replaced by a lawful provision which carries out, as closely as possible, the intention of the
parties and preserves the economic bargain contemplated by this Transfer Agreement and, in
such case, each and every other provision of this Transfer Agreement will remain in full force
and effect.






	8.3	 	Costs and Expenses. The parties will be responsible for the following costs and expenses
arising out of the transactions contemplated by this Transfer Agreement as follows:






	 	(A)	 	Ferro will be solely responsible for the fees and expenses of
KeyBanc Capital Markets whether or not the transactions are consummated; and






	 	(B)	 	If the transactions are consummated, Ferro will be solely
responsible for all Actual Taxes as described in Article II hereof.






Otherwise, each party will bear its own expenses incurred in connection with this Transfer
Agreement and the transactions contemplated by this Transfer Agreement, whether or not the
transactions are consummated.




	8.4	 	Notices. All notices, requests and other communications under this Transfer Agreement shall
be in writing and shall be deemed to have been duly given at the time of receipt if delivered
by hand or communicated by electronic transmission, or, if mailed, three days after mailing
with an international overnight courier:





	 	 	 	 	 
	If to Novolyte HK or Parent, to:
	 	 	 	 
	 
	 	Novolyte Technologies Limited/Novolyte Technologies LP
	c/o Arsenal Capital Management LP
320 Park Avenue, 30th Floor
New York, NY 10022
Attention: John Televantos
Telefax:
	 	 	1.212.771.1718	 
	With a copy (which shall not constitute notice to Parent or Novolyte HK) to:

	 
	 	Proskauer Rose LLP
	1585 Broadway
New York, NY 10036
Attention: Daniel J. Eisner
Telefax:
	 	 	1.212.969.2900	 
	If to Ferro, to:
	 	Ferro Corporation
	1000 Lakeside Avenue
Cleveland, Ohio 44114
USA
Attention:
	 	General Counsel
	Telefax:
	 	 	1.216.875.7275	 







Either party may change its notice address above to a different address by giving the other
party written notice of such change.




	8.5	 	Assignment. This Transfer Agreement will be binding upon and inure to the benefit of the
successors of the parties, but will not be assignable by any party without the prior written
consent of the other parties. Novolyte HK will have the right, however, if it so elects, to
assign all or an identified portion of its rights and delegate all or an identified portion of
its duties under this Transfer Agreement to an Affiliate of Novolyte HK or of Parent, if, at
the time of such assignment and delegation, (i) Novolyte HK provides Ferro with an
unconditional guarantee mutually agreed upon by Novolyte HK and Ferro, and (ii) this Transfer
Agreement has not been submitted to the Approval Authority and such assignment will not affect
or require a change of any term or content or effect of the documents already signed or
delivered in connection with the completion of the Suzhou Equity Transfer or the issuance of
the New Business License. Ferro hereby agrees that Novolyte HK may unilaterally grant a
security interest in its rights and interests hereunder to its or its Affiliates’ lender(s),
and Ferro will sign a consent with respect thereto if so requested by Novolyte HK or its
Affiliates’ lender(s).






	8.6	 	No Third Parties. Neither this Transfer Agreement nor any provisions set forth in this
Transfer Agreement is intended to, or shall, create any rights in or confer any benefits upon
any person other than the parties to this Transfer Agreement.






	8.7	 	Incorporation by Reference. The Appendices and Schedules to this Transfer Agreement
constitute integral parts of this Transfer Agreement and are hereby incorporated into this
Transfer Agreement by this reference.






	8.8	 	Governing Law. This Transfer Agreement will be governed by and construed in accordance with
the internal substantive laws of the P.R.C.






	8.9	 	Language. This Transfer Agreement is written in both English and Chinese. The English and
Chinese versions of this Transfer Agreement shall have equal force and effect.






	8.10	 	Counterparts. At least six counterparts of this Transfer Agreement shall be executed by the
parties hereto in both English and Chinese, and each fully executed counterpart shall be
deemed an original without production of the others. Each party shall hold one counterpart of
each language version, and Ferro Suzhou shall hold four counterparts for submission to the
Approval Authority for approval of the contemplated Suzhou Equity Transfer.






	8.11	 	Dispute Resolution/Arbitration. If the parties ever have a dispute involving their respective
rights and obligations under this Transfer Agreement, then the parties will resolve such
dispute as follows:






	 	(A)	 	Dispute Notice. Either Novolyte HK or Ferro may at any time
deliver to the other a written dispute notice setting forth a brief description
of the issues for which such notice initiates the dispute resolution mechanism
set forth in this Section 8.11. Such dispute notice shall also specify the
provision or provisions of this Transfer Agreement and the facts or
circumstances that are the subject matter of the dispute.






	 	(B)	 	Informal Negotiations. During the 30-day period following
delivery of a dispute notice described in Section 8.11, the parties will cause
their representatives to meet and seek to resolve the disputed items cordially
through informal negotiations






	 	(C)	 	Dispute Resolution Proceedings. If representatives of the
parties are unable to resolve disputed items through the informal negotiations
described in this Section 8.11, then within 15 days after the informal
negotiation period the parties will refer the disputed issues to a dispute
resolution panel for final resolution as follows:






(1) Designation of Representatives. Within seven (7) days after such informal
negotiation period, Novolyte HK and Ferro will each designate one representative to
serve on the dispute resolution panel. (If either party fails or refuses to
designate a representative, then the other party will be entitled to have a
representative appointed for such party by the CPR Institute.)




(2) Selection of Neutral. Promptly after they have been designated, the
designated representatives will meet and select a neutral person (the “Neutral”) to
serve as the third member of the dispute resolution panel. If the designated
representatives of parties cannot agree on a Neutral, then either representative may
request the CPR Institute to select the Neutral.




(3) Procedures and Process. At the time the matter is referred to the dispute
resolution panel, Novolyte HK and Ferro will jointly establish the procedures to be
followed with respect to the presentation of the parties’ respective positions and
the process by which the dispute resolution panel will reach and render its decision
on the disputed issues. Such procedures and processes will, at a minimum, assure
that –




(a) Each party will have the right to submit evidence to the dispute
resolution panel;




(b) Each party will have the right to present a written statement
concerning that party’s position with respect to the disputed item;
and




(c) Before reaching a decision concerning the disputed item, the
dispute resolution panel will convene a hearing at which both parties
may be represented.




If Novolyte HK and Ferro cannot agree on such procedures and processes, then the
Neutral will establish such procedures and process which will, in all events, be
consistent with the foregoing.




(4) Decision. The dispute resolution panel will act by majority vote. The
dispute resolution panel will base its decision on applicable provisions of this
Transfer Agreement or, if the provisions of this Transfer Agreement do not resolve
the matter, on general principles of substantive P.R.C. law. (The dispute
resolution panel may, if it so desires, seek the opinion of an attorney licensed to
practice law in the P.R.C. on any matter of substantive P.R.C. law on which the
panel desires clarification.) If the dispute resolution panel concludes that one
party did not proceed in good faith in connection with the prosecution or defense of
a disputed claim, then the panel will have the power, if it so chooses, to award the
other party its costs and expenses in connection with the dispute resolution
proceedings; otherwise, each party will be solely responsible for its own costs and
one-half of the dispute resolution panel’s fees and costs in connection with such
proceedings.




	 	(D)	 	Equitable Relief. Notwithstanding any other provision of this
Section 8.11, either party may seek from a court of competent jurisdiction
interim injunctive relief in order to maintain the status quo or protect such
party’s rights under this Transfer Agreement pending resolution of a dispute
pursuant to this Section 8.11.






	 	(E)	 	Binding Effect. The decisions of the dispute resolution panel
under this Section 8.11 will be binding on both Ferro and Novolyte HK and
Parent and will be neither appealable, contestable, or subject to collateral
attack by Ferro or Novolyte HK or Parent.





To evidence their agreement as stated above, Novolyte Technologies Limited, Novolyte
Technologies LP and Ferro Corporation have each caused their respective duly
authorized directors, officers, or attorneys to execute this Transfer Agreement as of [Month NN],
200     .



	 	 	 
	By: Novolyte Technologies Limited

	 	By: Ferro Corporation
	 

	 	 
	By:

	 	By:
	 

	 	 
	[Name of Signatory]

[Title of Signatory]

[Nationality of Signatory]

	 	[Name of Signatory]

[Title of Signatory]

[Nationality of Signatory]
	 

	 	 
	By: Novolyte Technologies LP

By:

	 	



	 

	 	

	[Name of Signatory]

[Title of Signatory]

[Nationality of Signatory]

	 	











8




Appendix A




The following terms identified with initial capital letters are defined in the following
Sections of the Transfer Agreement:



	 	 	 
	Term	 	Cross Reference
	Actual Taxes

	 	Section 2.1
	Amended Articles

	 	Section 3.3(B)
	Application Letter

	 	Section 3.2(B)
	Approval Authority

	 	Section 4.1
	Cash Amount

	 	Section 2.1
	Estimated EI Taxes

	 	Section 2.2
	Estimated Taxes

	 	Section 2.1
	Novolyte HK

	 	Preamble
	Escrow Agent

	 	Section 2.1
	Escrow Agreement

	 	Section 2.1
	Ferro

	 	Preamble
	Ferro Suzhou

	 	Recital A
	Fine Chemicals Business

	 	Recital B
	Neutral

	 	Section 8.11
	New Business License

	 	Section 4.1
	Parent

	 	Preamble
	P.R.C.

	 	Recital A
	Purchase Price

	 	Section 2.1
	SAIC

	 	Section 4.1
	Suzhou Equity Closing

	 	Section 5.1
	Suzhou Equity Closing Date

	 	Section 5.1
	Suzhou Equity Interest

	 	Recital A
	Suzhou Equity Transfer

	 	Section 1.2
	Suzhou Equity Transfer Application

	 	Section 3.2(B)
	Transfer Agreement

	 	Preamble






9




In addition, the following terms have the meanings set forth below where used in the Transfer
Agreement and identified with initial capital letters:



	 	 	 
	Affiliate

	 	With respect to a party, any other entity

controlling, controlled by, or under common

control with such party.
	Ancillary Certificates

	 	The organizational code certificate, tax

registration certificate, foreign exchange

registration certificate, customs registration

certificate and other establishment related

certificates that Ferro Suzhou needs to obtain

under P.R.C. laws and regulations after getting

its new Business Licence duly reflecting the

Split-off Transaction.
	CPR Institute

	 	CPR Institute for Dispute Resolution, 366 Madison

Avenue, New York, New York.
	 

	 	 
	Default

	 	An occurrence which constitutes a breach or

default under a contract, order, or other

commitment, after the expiration of any grace

period provided without cure.
	 

	 	 
	Encumbrance

	 	Any encumbrance or lien, including, without

limitation, any mortgage, judgment lien,

materialman’s lien, mechanic’s lien, security

interest, encroachment, easement, or other

restriction.
	 

	 	 
	Governmental Entit(y) (ies)

	 	Any court of competent jurisdiction, governmental

agency, authority, instrumentality or regulatory

body.
	 

	 	 
	Owns or Ownership

	 	Such ownership as confers upon the party or

person having it good and marketable title to and

control over the thing or right owned, free and

clear of any and all Encumbrances.
	 

	 	 
	Split-Off Transaction

	 	The transaction to divide the assets and

liabilities of the Fine Chemicals Business from

the assets and liabilities of Ferro’s businesses

in the P.R.C. which are not related to the Fine

Chemicals Business, which Split-Off Transaction

shall be deemed effective upon the issuance of

the New Business Licence of Ferro Suzhou by SIP

AIC.
	 

	 	 







10