Insurance; Financial Support Arrangements. (a) Newco and the Purchasers acknowledge and agree that as of the Closing Date, neither Newco, the Business or any of the Business Units, any property owned or leased by any of the foregoing nor any of the directors, officers, employees (including, without limitation, the Transferred Employees) or agents of any of the foregoing will be insured under any insurance policies maintained by Lockheed Xxxxxx or any of its Affiliates, except (i) in the case of certain policies, to the extent that a claim has been reported as of the Closing Date, (ii) in the case of a policy that is an occurrence policy, to the extent the accident, event or occurrence that results in an insurable loss occurs prior to the Closing Date and has been, is or will be reported or noticed to the respective carrier by Newco or any of the Lockheed Xxxxxx Companies in accordance with the requirements of such policies (which claims Lockheed Xxxxxx shall, at Newco's cost and expense, pursue diligently on Newco's behalf and the net proceeds of which claims shall be remitted promptly to Newco upon receipt thereof), and (iii) as otherwise provided in Exhibit G or agreed to in writing by the parties. Except as otherwise provided in Exhibit G or as otherwise may be agreed to in writing by the parties, from and after the Closing Date, Lockheed Xxxxxx shall have no obligation of any kind to maintain any form of insurance covering all or any part of the Transferred Assets, the Business or the Transferred Employees. (b) Newco agrees to reimburse Lockheed Xxxxxx within 30 days of receipt of an invoice for the items set forth below. (i) The allocated cost to the Business of premiums, costs and expenses (excluding Lockheed Xxxxxx risk management department costs and expenses), including general and administrative charges, for all periods prior to the Closing Date in respect of any and all insurance policies that cover or covered the Business, whether or not a claim has been made or ever will be made by the Business or Newco under such policies. The "allocated cost" to the Business shall be determined by Lockheed Xxxxxx in a manner consistent with prior practices and in conjunction with the Cost Disclosure Statement filed by Lockheed Xxxxxx or any of its Affiliates and their predecessors with the U.S. Government on the portion of the period covered by the respective policies that ends prior to the Closing Date, except that with respect to policies for which no premium rebate or refund is available as a result of the consummation of the Contemplated Transactions, the "allocated cost" to the Business shall be based on the entire policy period. Newco and the Purchasers understand that Lockheed Xxxxxx is in the process of reviewing with the U.S. Government the methodology used by Lockheed Xxxxxx and its Affiliates to allocate premiums, costs, expenses and reserves to various businesses and divisions, including the Business Units, and acknowledge that any changes to such allocation methodology may result in retroactive adjustments to the allocated cost to the Business of premiums, costs and expenses. In the event of any such change to the allocation methodology, Lockheed Xxxxxx and Newco agree to adjust the allocated costs to the Business (either through a special charge or credit to Newco under this Section 8.03(b)(i)) as appropriate. (ii) Any self insurance, retention, deductible, retrospective premium, cash payment for reserves calculated or charged on an incurred loss basis and similar items, including but not limited to associated administrative expenses and allocated loss adjustment or similar expenses (collectively, "Insurance Liabilities") allocated to the Business by Lockheed Xxxxxx on a basis consistent with past practices resulting from or arising under any and all current or former insurance policies maintained by Lockheed Xxxxxx or any of its Affiliates to the extent that such Insurance Liabilities relate to or arise out of the Business or any activities of Newco. Newco agrees that, to the extent any of the insurers under the insurance policies, in accordance with the terms of the insurance policies, requests or requires collateral, deposits or other security to be provided with respect to claims made against such insurance policies relating to or arising from the Business, Newco will provide the collateral, deposits or other security or, upon request of Lockheed Xxxxxx, xxxx replace any collateral, deposits or other security provided by Lockheed Xxxxxx or any of its Affiliates. (c) Newco agrees that, for a period of at least six years commencing on the Closing Date, to the extent it maintains insurance coverage, Newco will (at Lockheed Xxxxxx'x cost to the extent of any additional cost therefor, provided that, in the event there will be such a cost, Newco will give Lockheed Xxxxxx a reasonable period of time to determine whether it desires to incur such cost before Newco commits to such coverage with respect to Lockheed Xxxxxx) include Lockheed Xxxxxx and its Affiliates as an additional insured/loss payee on any policies in respect of which Lockheed Xxxxxx or its Affiliates has or may have an insurable interest with respect to the Business, the Transferred Assets, any of the Assumed Liabilities or any facilities the possession of which will be transferred to Newco at the Closing. (d) Newco and the Purchasers agree that, not later than September 30, 1997, and in a manner reasonably satisfactory to Lockheed Xxxxxx, Newco will in good faith seek to release Lockheed Xxxxxx and its Affiliates from all obligations under all Financial Support Arrangements maintained by Lockheed Xxxxxx or any of its Affiliates in connection with the Business. (e) Lockheed Xxxxxx will use reasonable commercial efforts to cause each Financial Support Arrangement to remain in full force and effect in accordance with its terms until the earliest of (i) the date (the "Release Date") on which Newco ensures that Lockheed and its Affiliates are released from all obligations of Lockheed Xxxxxx and its Affiliates under such Financial Support Arrangement in accordance with Section 8.03(d), (ii) September 30, 1997 and (iii) the date such Financial Support Arrangement terminates in accordance with its terms. After the Closing Date and prior to the Release Date for any such Financial Support Arrangement, Lockheed Xxxxxx will not waive any requirements of or agree to amend such Financial Support Arrangement without the prior written consent of Newco. (f) If, after the Closing Date, (i) any amounts are drawn on or paid under any Financial Support Arrangement where Lockheed Xxxxxx or any of its Affiliates is obligated to reimburse the Person making such payment or (ii) Lockheed Xxxxxx or any of its Affiliates pays any amounts under, or any fees, costs or expenses relating to, any Financial Support Arrangement, Newco shall pay Lockheed Xxxxxx such amounts promptly after receipt from Lockheed Xxxxxx of notice thereof accompanied by written evidence of the underlying payment obligation. (g) In the event that Newco fails to ensure that Lockheed Xxxxxx and its Affiliates are released from all obligations under the Financial Support Arrangements not later than September 30, 1997, Newco shall either (i) promptly deposit with Lockheed Xxxxxx xxxx in an amount equal to the aggregate principal or stated amount, as may be applicable, of the Financial Support Arrangements not so released or (ii) provide back-up letters of credit in form and substance reasonably satisfactory to Lockheed Xxxxxx with respect to such Financial Support Arrangements; provided that if Newco has used reasonable commercial efforts to structure its financing arrangements to permit it to comply with the foregoing obligations, Newco shall not be required to take any action under this Section 8.03(g) that it is prohibited from taking under the terms of any financing agreements of Newco in effect on the Closing Date. Any cash deposited with Lockheed Xxxxxx in accordance with clause (i) shall be held by Lockheed Xxxxxx in a segregated interest-bearing account and shall be used by Lockheed Xxxxxx solely to satisfy its payment obligations in respect of such Financial Support Arrangements, and the unused portion of any cash (including interest) relating to a Financial Support Arrangement shall be returned to Newco promptly after the occurrence of the Release Date with respect to, or any other termination of, the Financial Support Arrangement. (h) In the event that Newco fails to ensure that Lockheed Xxxxxx and its Affiliates are released from all obligations of Lockheed Xxxxxx and its Affiliates under the Disclosed Financial Support Arrangements not later than September 30, 1997, whether as a result of the proviso to the first sentence of Section 8.03(g) or otherwise, and to the extent that Newco has not provided the deposits or letters of credit contemplated by the first sentence of Section 8.03(g), on October 1, 1997 and on the first day of each calendar quarter thereafter Newco agrees to pay to Lockheed Xxxxxx an amount equal to (i) .3125% of the maximum aggregate potential liability of Lockheed Xxxxxx and its Affiliates under such Disclosed Financial Support Arrangements in the case of performance-related Disclosed Financial Support Arrangements or (ii) .625% of the maximum aggregate potential liability of Lockheed Xxxxxx and its Affiliates under such Disclosed Financial Support Arrangements in the case of all other Disclosed Financial Support Arrangements (other than Disclosed Financial Support Arrangements that constitute non-monetary performance guarantees or similar non-monetary obligations) that have not been released or otherwise secured by the deposits or letters of credit contemplated by the first sentence of Section 8.03(g) (determined as of the last day of the preceding calendar quarter). Any such payment by Newco shall be due and payable on October 1, 1997 or on the first day of the applicable calendar month thereafter, and shall be nonrefundable regardless of any subsequent reduction of the liability of Lockheed Xxxxxx or any of its Affiliates thereunder.
Appears in 2 contracts
Samples: Transaction Agreement (Southern California Microwave Inc), Transaction Agreement (L 3 Communications Holdings Inc)
Insurance; Financial Support Arrangements. (a) Newco The Purchaser acknowledges and the Purchasers acknowledge and agree agrees that as of the Closing DateDate neither the Purchaser, neither Newco, the Business or any of the Business UnitsCE, any property owned or leased by any of the foregoing Purchaser or CE, nor any of the directors, officers, employees (including, without limitation, the Transferred Employees) or agents of any of the foregoing Purchaser or CE will be insured under any insurance policies maintained by Lockheed Xxxxxx the Seller or any of its Affiliates, except (i) in the case of certain policies, to the extent that a claim has been reported as of the Closing Date, Date and (ii) in the case of a policy that is an occurrence policy, to the extent the accident, event or occurrence that results in an insurable loss occurs prior to the Closing Date and has been, is or will be reported or noticed to the respective carrier by Newco or any of the Lockheed Xxxxxx Companies in accordance with the requirements of such policies (which claims Lockheed Xxxxxx shall, at Newco's cost and expense, pursue diligently on Newco's behalf and the net proceeds of which claims shall be remitted promptly to Newco upon receipt thereof), and (iii) as otherwise provided in Exhibit G or agreed to in writing by the partiespolicy. Except as otherwise provided in Exhibit G or as otherwise may be agreed to in writing by the parties, from From and after the Closing Date, Lockheed Xxxxxx neither the Seller nor any of its Affiliates shall have no any obligation of any kind to maintain any form of insurance covering all or any part of the Transferred Assets, the Business CE or the Transferred Employeesassets, business or employees of CE.
(b) Newco The Purchaser agrees to reimburse Lockheed Xxxxxx the Seller within 30 90 days of receipt of an invoice, accompanied by a complete description of the event or events on which the invoice is based and all documentation related thereto, for the items set forth below.
(i) The allocated cost to the Business of premiums, costs and expenses (excluding Lockheed Xxxxxx risk management department costs and expenses), including general and administrative charges, for all periods prior to the Closing Date in respect amount of any and all insurance policies that cover or covered the Business, whether or not a claim has been made or ever will be made by the Business or Newco under such policies. The "allocated cost" to the Business shall be determined by Lockheed Xxxxxx in a manner consistent with prior practices and in conjunction with the Cost Disclosure Statement filed by Lockheed Xxxxxx or any of its Affiliates and their predecessors with the U.S. Government on the portion of the period covered by the respective policies that ends prior to the Closing Date, except that with respect to policies for which no premium rebate or refund is available as a result of the consummation of the Contemplated Transactions, the "allocated cost" to the Business shall be based on the entire policy period. Newco and the Purchasers understand that Lockheed Xxxxxx is in the process of reviewing with the U.S. Government the methodology used by Lockheed Xxxxxx and its Affiliates to allocate premiums, costs, expenses and reserves to various businesses and divisions, including the Business Units, and acknowledge that any changes to such allocation methodology may result in retroactive adjustments to the allocated cost to the Business of premiums, costs and expenses. In the event of any such change to the allocation methodology, Lockheed Xxxxxx and Newco agree to adjust the allocated costs to the Business (either through a special charge or credit to Newco under this Section 8.03(b)(i)) as appropriate.
(ii) Any self insurance, and the amount of any retention, deductible, retrospective premium, cash payment for reserves calculated or charged on an incurred loss basis and similar items, including but not limited to associated administrative expenses and allocated loss adjustment or similar out-of-pocket expenses of third parties paid within three years of the Closing Date by the Seller or any of its Affiliates to one or more of the companies insuring the business of CE (collectively, "Insurance Liabilities") and which (i) under the principles and practices with respect to such matters followed by CE and the Seller prior to the Closing Date, as disclosed to the Purchaser in the documentation submitted with the invoice, would have been allocated to CE by the Business by Lockheed Xxxxxx on a basis consistent with past practices resulting Seller, (ii) result from or arising arise under any and all current or former insurance policies maintained by Lockheed Xxxxxx the Seller or any of its Affiliates with respect to the extent that such Insurance Liabilities activities of CE, and (iii) relate to or arise out of the Business business of CE prior to the Closing Date; provided, that the Purchaser shall not be required to reimburse the Seller for any Insurance Liabilities that relate to activities, conduct or any activities conditions with respect to which the Seller is responsible or liable under the terms of Newco. Newco this Agreement.
(c) The Purchaser agrees that, to the extent any of the insurers under any of the insurance policiespolicies maintained by the Seller or any of its Affiliates, in accordance with the terms of the insurance policies, requests or requires collateral, deposits or other security to be provided with respect to claims made against such insurance policies relating to or arising from the Businessbusiness of CE, Newco the Purchaser will provide the collateral, deposits or other security or, upon request of Lockheed Xxxxxxthe Seller, xxxx will replace any collateral, deposits or other security provided by Lockheed Xxxxxx the Seller or any of its Affiliates.
(c) Newco agrees that, for a period of at least six years commencing on the Closing Date, to the extent it maintains insurance coverage, Newco will (at Lockheed Xxxxxx'x cost to the extent of any additional cost therefor, provided that, in the event there will be such a cost, Newco will give Lockheed Xxxxxx a reasonable period of time to determine whether it desires to incur such cost before Newco commits to such coverage with respect to Lockheed Xxxxxx) include Lockheed Xxxxxx and its Affiliates as an additional insured/loss payee on any policies in respect of which Lockheed Xxxxxx or its Affiliates has or may have an insurable interest with respect to the Business, the Transferred Assets, any of the Assumed Liabilities or any facilities the possession of which will be transferred to Newco at the Closing.
(d) Newco and the Purchasers agree The Purchaser agrees that, not later than September 30December 31, 19971998, and in a manner reasonably satisfactory to Lockheed Xxxxxxthe Seller, Newco the Purchaser will in good faith seek to release Lockheed Xxxxxx ensure that the Seller and its Affiliates are released from all obligations of the Seller and its Affiliates under all Financial Support Arrangements maintained by Lockheed Xxxxxx the Seller or any of its Affiliates in connection with the BusinessBusiness of CE. A list of all such Financial Support Arrangements in effect as of the date of this Agreement is set forth in Schedule 6.03.
(e) Lockheed Xxxxxx The Seller will use reasonable commercial efforts to cause each Financial Support Arrangement to remain in full force and effect in accordance with its terms until the earliest of (i) the date (the "Release Date") on which Newco the Purchaser ensures that Lockheed the Seller and its Affiliates are released from all obligations of Lockheed Xxxxxx the Seller and its Affiliates under such Financial Support Arrangement in accordance with Section 8.03(d6.03(d), (ii) September 30December 31, 1997 1998 and (iii) the date such Financial Support Arrangement terminates in accordance with its terms. After the Closing Date and prior to the Release Date for any such Financial Support Arrangement, Lockheed Xxxxxx the Seller will not waive any requirements of or agree to amend such Financial Support Arrangement without the prior written consent of Newcothe Purchaser.
(f) If, after the Closing Date, (i) any amounts are drawn on or paid under any Financial Support Arrangement where Lockheed Xxxxxx the Seller or any of its Affiliates is obligated to reimburse the Person making such payment or (ii) Lockheed Xxxxxx the Seller or any of its Affiliates pays any amounts under, or any fees, costs or expenses relating to, any Financial Support Arrangement, Newco the Purchaser shall pay Lockheed Xxxxxx the Seller such amounts promptly after receipt from Lockheed Xxxxxx the Seller of notice thereof accompanied by written evidence of the underlying payment obligation.
(g) In the event that Newco the Purchaser fails to ensure that Lockheed Xxxxxx the Seller and its Affiliates are released from all obligations of the Seller and its Affiliates under the Financial Support Arrangements not later than September 30December 31, 19971998, Newco the Purchaser shall either (i) promptly deposit with Lockheed Xxxxxx xxxx the Seller cash in an amount equal to the aggregate principal or stated amount, as may be applicable, of the Financial Support Arrangements not so released or (ii) subject to the prior approval of the Seller, provide back-up letters of credit in form and substance reasonably satisfactory to Lockheed Xxxxxx the Seller with respect to such Financial Support Arrangements; provided that if Newco has used reasonable commercial efforts to structure its financing arrangements to permit it to comply with the foregoing obligations, Newco shall not be required to take any action under this Section 8.03(g) that it is prohibited from taking under the terms of any financing agreements of Newco in effect on the Closing Date. Any cash deposited with Lockheed Xxxxxx the Seller in accordance with clause (i) shall be held by Lockheed Xxxxxx the Seller in a segregated interest-bearing account and shall be used by Lockheed Xxxxxx the Seller solely to satisfy its payment obligations in respect of such Financial Support Arrangements, and the unused portion of any cash (including interest) relating to a Financial Support Arrangement shall be returned to Newco the Purchaser promptly after the occurrence of the Release Date with respect to, or any other termination of, the Financial Support Arrangement.
(h) In the event that Newco fails to ensure that Lockheed Xxxxxx and its Affiliates are released from all obligations of Lockheed Xxxxxx and its Affiliates under the Disclosed Financial Support Arrangements not later than September 30, 1997, whether as a result of the proviso to the first sentence of Section 8.03(g) or otherwise, and to the extent that Newco has not provided the deposits or letters of credit contemplated by the first sentence of Section 8.03(g), on October 1, 1997 and on the first day of each calendar quarter thereafter Newco agrees to pay to Lockheed Xxxxxx an amount equal to (i) .3125% of the maximum aggregate potential liability of Lockheed Xxxxxx and its Affiliates under such Disclosed Financial Support Arrangements in the case of performance-related Disclosed Financial Support Arrangements or (ii) .625% of the maximum aggregate potential liability of Lockheed Xxxxxx and its Affiliates under such Disclosed Financial Support Arrangements in the case of all other Disclosed Financial Support Arrangements (other than Disclosed Financial Support Arrangements that constitute non-monetary performance guarantees or similar non-monetary obligations) that have not been released or otherwise secured by the deposits or letters of credit contemplated by the first sentence of Section 8.03(g) (determined as of the last day of the preceding calendar quarter). Any such payment by Newco shall be due and payable on October 1, 1997 or on the first day of the applicable calendar month thereafter, and shall be nonrefundable regardless of any subsequent reduction of the liability of Lockheed Xxxxxx or any of its Affiliates thereunder.
Appears in 1 contract
Insurance; Financial Support Arrangements. (a) Newco Buyer acknowledges and the Purchasers acknowledge and agree agrees that as of the Closing Date, neither NewcoTTSI, the Business or any of the Business UnitsTTS Business, any property owned or leased by any of the foregoing nor any of the directors, officers, employees (including, without limitation, the Transferred Employees) or agents of any of the foregoing will be insured under any insurance policies maintained by Lockheed Xxxxxx Parent or any of its Affiliates, except (i) in the case of certain claims made policies, to the extent that a claim has been reported as of the Closing Date, (ii) in the case of a policy that is an occurrence policy, to the extent the accident, event or occurrence that results in an insurable loss occurs prior to the Closing Date and has been, is or will be reported or noticed to the respective carrier by Newco Buyer, TTSI or any of the Lockheed Xxxxxx Companies Seller Company in accordance with the requirements of such policies (which claims Lockheed Xxxxxx Parent shall, at NewcoTTSI's cost and expense, pursue diligently on NewcoTTSI's behalf and the net proceeds of which claims (except to the extent they relate to Excluded Liabilities) shall be remitted promptly to Newco TTSI upon receipt thereof), and (iii) as otherwise provided in Exhibit G D or agreed to in writing by the parties. Except as otherwise provided in Exhibit G D or as otherwise may be agreed to in writing by the parties, from and after the Closing Date, Lockheed Xxxxxx Parent and its Affiliates shall have no obligation of any kind to maintain any form of insurance covering TTSI or all or any part of the Transferred Contributed Assets, the Transferred Intellectual Property, the TTS Business or the Transferred Employees.
(b) Newco From and after the Closing Date, TTSI agrees to reimburse Lockheed Xxxxxx Parent within 30 days of receipt of an invoice for the items set forth below.
(i) The allocated cost to the Business of premiums, costs and expenses (excluding Lockheed Xxxxxx risk management department costs and expenses), including general and administrative charges, for all periods prior to the Closing Date in respect of any and all insurance policies that cover or covered the Business, whether or not a claim has been made or ever will be made by the Business or Newco under such policies. The "allocated cost" to the Business shall be determined by Lockheed Xxxxxx in a manner consistent with prior practices and in conjunction with the Cost Disclosure Statement filed by Lockheed Xxxxxx or any of its Affiliates and their predecessors with the U.S. Government on the portion of the period covered by the respective policies that ends prior to the Closing Date, except that with respect to policies for which no premium rebate or refund is available as a result of the consummation of the Contemplated Transactions, the "allocated cost" to the Business shall be based on the entire policy period. Newco and the Purchasers understand that Lockheed Xxxxxx is in the process of reviewing with the U.S. Government the methodology used by Lockheed Xxxxxx and its Affiliates to allocate premiums, costs, expenses and reserves to various businesses and divisions, including the Business Units, and acknowledge that any changes to such allocation methodology may result in retroactive adjustments to the allocated cost to the Business of premiums, costs and expenses. In the event of any such change to the allocation methodology, Lockheed Xxxxxx and Newco agree to adjust the allocated costs to the Business (either through a special charge or credit to Newco under this Section 8.03(b)(i)) as appropriate.
(ii) Any self insurance, retention, deductible, retrospective premium, cash payment for reserves calculated or charged on an incurred loss basis and similar items, including but not limited to associated administrative expenses and allocated loss adjustment or similar expenses (collectively, "Insurance Liabilities") allocated to TTSI or the TTS Business by Lockheed Xxxxxx Parent on a basis consistent with past practices resulting from or arising under any and all current or former insurance policies maintained by Lockheed Xxxxxx Parent or any of its Affiliates to the extent that such Insurance Liabilities relate to or arise out of Assumed Liabilities, but only to the Business or any activities extent that the underlying claim was that of Newcoa third party and not a Seller Company. Newco TTSI agrees that, to the extent any of the insurers under the insurance policies, in accordance with the terms of the insurance policies, requests or requires collateral, deposits or other security to be provided with respect to claims made against such insurance policies relating to or arising from TTSI or the TTS Business, Newco will TTSI shall provide the collateral, deposits or other security or, upon request of Lockheed XxxxxxParent, xxxx will replace any collateral, deposits or other security provided by Lockheed Xxxxxx Parent or any of its Affiliates.
(c) Newco TTSI agrees that, for a period of at least six years commencing on the Closing Date, to the extent it TTSI maintains product liability or similar insurance coverage, Newco TTSI will (at Lockheed Xxxxxx'x Parent's cost to the extent of any additional cost therefor, provided that, in the event there will be such a cost, Newco TTSI will give Lockheed Xxxxxx Parent a reasonable period of time to determine whether it desires to incur such cost before Newco TTSI commits to such coverage with respect to Lockheed XxxxxxParent) include Lockheed Xxxxxx Parent and its Affiliates as an additional insured/loss payee on any such policies in respect of which Lockheed Xxxxxx Parent or its Affiliates has or may have an insurable interest with respect to TTSI or the TTS Business, the Contributed Assets, Transferred AssetsIntellectual Property, any of the Assumed Liabilities or any facilities the possession of which will be transferred to Newco at the TTSI in accordance with this Agreement prior to Closing.
(d) Newco and the Purchasers Parent, TTSI and, prior to Closing, Buyer agree that, not later than September 30, 1997, and in a manner reasonably satisfactory to Lockheed Xxxxxx, Newco will that they shall in good faith seek to obtain the release Lockheed Xxxxxx of Parent and its Affiliates from all obligations under all Financial Support Arrangements maintained by Lockheed Xxxxxx Parent or any of its Affiliates in connection with TTSI or the TTS Business.
(e) Lockheed Xxxxxx will use reasonable commercial efforts to cause each Financial Support Arrangement to remain in full force and effect in accordance with its terms until the earliest of (i) the date (the "Release Date") on which Newco ensures that Lockheed and its Affiliates are released from all obligations of Lockheed Xxxxxx and its Affiliates under such Financial Support Arrangement in accordance with Section 8.03(d), (ii) September 30, 1997 and (iii) the date such Financial Support Arrangement terminates in accordance with its terms. After the Closing Date and prior to the Release Date for any such Financial Support Arrangement, Lockheed Xxxxxx will not waive any requirements of or agree to amend such Financial Support Arrangement without the prior written consent of Newco.
(f) If, at any time after the Closing Date, (i) any amounts are drawn on or paid under any Financial Support Arrangement where Lockheed Xxxxxx Parent or any of its Affiliates is obligated to reimburse the Person making such payment or (ii) Lockheed Xxxxxx Parent or any of its Affiliates pays any amounts under, or any fees, costs or expenses relating to, any Financial Support Arrangement, Newco TTSI shall indemnify and hold Parent and its Affiliates harmless and pay Lockheed Xxxxxx Parent such amounts promptly after receipt from Lockheed Xxxxxx Parent of notice thereof accompanied by written evidence of the underlying payment obligation.
(g) In the event that Newco fails to ensure that Lockheed Xxxxxx and its Affiliates are released from all obligations under the Financial Support Arrangements not later than September 30, 1997, Newco shall either (i) promptly deposit with Lockheed Xxxxxx xxxx in an amount equal to the aggregate principal or stated amount, as may be applicable, of the Financial Support Arrangements not so released or (ii) provide back-up letters of credit in form and substance reasonably satisfactory to Lockheed Xxxxxx with respect to such Financial Support Arrangements; provided that if Newco has used reasonable commercial efforts to structure its financing arrangements to permit it to comply with the foregoing obligations, Newco shall not be required to take any action under this Section 8.03(g) that it is prohibited from taking under the terms of any financing agreements of Newco in effect on the Closing Date. Any cash deposited with Lockheed Xxxxxx in accordance with clause (i) shall be held by Lockheed Xxxxxx in a segregated interest-bearing account and shall be used by Lockheed Xxxxxx solely to satisfy its payment obligations in respect of such Financial Support Arrangements, and the unused portion of any cash (including interest) relating to a Financial Support Arrangement shall be returned to Newco promptly after the occurrence of the Release Date with respect to, or any other termination of, the Financial Support Arrangement.
(h) In the event that Newco fails to ensure that Lockheed Xxxxxx and its Affiliates are released from all obligations of Lockheed Xxxxxx and its Affiliates under the Disclosed Financial Support Arrangements not later than September 30, 1997, whether as a result of the proviso to the first sentence of Section 8.03(g) or otherwise, and to the extent that Newco has not provided the deposits or letters of credit contemplated by the first sentence of Section 8.03(g), on October 1, 1997 and on the first day of each calendar quarter thereafter Newco agrees to pay to Lockheed Xxxxxx an amount equal to (i) .3125% of the maximum aggregate potential liability of Lockheed Xxxxxx and its Affiliates under such Disclosed Financial Support Arrangements in the case of performance-related Disclosed Financial Support Arrangements or (ii) .625% of the maximum aggregate potential liability of Lockheed Xxxxxx and its Affiliates under such Disclosed Financial Support Arrangements in the case of all other Disclosed Financial Support Arrangements (other than Disclosed Financial Support Arrangements that constitute non-monetary performance guarantees or similar non-monetary obligations) that have not been released or otherwise secured by the deposits or letters of credit contemplated by the first sentence of Section 8.03(g) (determined as of the last day of the preceding calendar quarter). Any such payment by Newco shall be due and payable on October 1, 1997 or on the first day of the applicable calendar month thereafter, and shall be nonrefundable regardless of any subsequent reduction of the liability of Lockheed Xxxxxx or any of its Affiliates thereunder.
Appears in 1 contract
Samples: Reorganization, Recapitalization and Stock Purchase Agreement (Black & Decker Corp)
Insurance; Financial Support Arrangements. (a) Newco Buyer acknowledges and the Purchasers acknowledge and agree agrees that as of the Closing Date, neither NewcoTTSI, the Business or any of the Business UnitsTTS Business, any property owned or leased by any of the foregoing nor any of the directors, officers, employees (including, without limitation, the Transferred Employees) or agents of any of the foregoing will be insured under any insurance policies maintained by Lockheed Xxxxxx Parent or any of its Affiliates, except (i) in the case of certain claims made policies, to the extent that a claim has been reported as of the Closing Date, (ii) in the case of a policy that is an occurrence policy, to the extent the accident, event or occurrence that results in an insurable loss occurs prior to the Closing Date and has been, is or will be reported or noticed to the respective carrier by Newco Buyer, TTSI or any of the Lockheed Xxxxxx Companies Seller Company in accordance with the requirements of such policies (which claims Lockheed Xxxxxx Parent shall, at NewcoTTSI's cost and expense, pursue diligently on NewcoTTSI's behalf and the net proceeds of which claims (except to the extent they relate to Excluded Liabilities) shall be remitted promptly to Newco TTSI upon receipt thereof), and (iii) as otherwise provided in Exhibit G D or agreed to in writing by the parties. Except as otherwise provided in Exhibit G D or as otherwise may be agreed to in writing by the parties, from and after the Closing Date, Lockheed Xxxxxx Parent and its Affiliates shall have no obligation of any kind to maintain any form of insurance covering TTSI or all or any part of the Transferred Contributed Assets, the Transferred Intellectual Property, the TTS Business or the Transferred Employees.
(b) Newco From and after the Closing Date, TTSI agrees to reimburse Lockheed Xxxxxx Parent within 30 days of receipt of an invoice for the items set forth below.
(i) The allocated cost to the Business of premiums, costs and expenses (excluding Lockheed Xxxxxx risk management department costs and expenses), including general and administrative charges, for all periods prior to the Closing Date in respect of any and all insurance policies that cover or covered the Business, whether or not a claim has been made or ever will be made by the Business or Newco under such policies. The "allocated cost" to the Business shall be determined by Lockheed Xxxxxx in a manner consistent with prior practices and in conjunction with the Cost Disclosure Statement filed by Lockheed Xxxxxx or any of its Affiliates and their predecessors with the U.S. Government on the portion of the period covered by the respective policies that ends prior to the Closing Date, except that with respect to policies for which no premium rebate or refund is available as a result of the consummation of the Contemplated Transactions, the "allocated cost" to the Business shall be based on the entire policy period. Newco and the Purchasers understand that Lockheed Xxxxxx is in the process of reviewing with the U.S. Government the methodology used by Lockheed Xxxxxx and its Affiliates to allocate premiums, costs, expenses and reserves to various businesses and divisions, including the Business Units, and acknowledge that any changes to such allocation methodology may result in retroactive adjustments to the allocated cost to the Business of premiums, costs and expenses. In the event of any such change to the allocation methodology, Lockheed Xxxxxx and Newco agree to adjust the allocated costs to the Business (either through a special charge or credit to Newco under this Section 8.03(b)(i)) as appropriate.
(ii) Any self insurance, retention, deductible, retrospective premium, cash payment for reserves calculated or charged on an incurred loss basis and similar items, including but not limited to associated administrative expenses and allocated loss adjustment or similar expenses (collectively, "Insurance Liabilities") allocated to TTSI or the TTS Business by Lockheed Xxxxxx Parent on a basis consistent with past practices resulting from or arising under any and all current or former insurance policies maintained by Lockheed Xxxxxx Parent or any of its Affiliates to the extent that such Insurance Liabilities relate to or arise out of Assumed Liabilities, but only to the Business or any activities extent that the underlying claim was that of Newcoa third party and not a Seller Company. Newco TTSI agrees that, to the extent any of the insurers under the insurance policies, in accordance with the terms of the insurance policies, requests or requires collateral, deposits or other security to be provided with respect to claims made against such insurance policies relating to or arising from TTSI or the TTS Business, Newco will TTSI shall provide the collateral, deposits or other security or, upon request of Lockheed XxxxxxParent, xxxx will replace any collateral, deposits or other security provided by Lockheed Xxxxxx Parent or any of its Affiliates.
(c) Newco TTSI agrees that, for a period of at least six years commencing on the Closing Date, to the extent it TTSI maintains product liability or similar insurance coverage, Newco TTSI will (at Lockheed Xxxxxx'x Parent's cost to the extent of any additional cost therefor, provided that, in the event there will be such a cost, Newco TTSI will give Lockheed Xxxxxx Parent a reasonable period of time to determine whether it desires to incur such cost before Newco commits to such coverage with respect to Lockheed Xxxxxx) include Lockheed Xxxxxx and its Affiliates as an additional insured/loss payee on any policies in respect of which Lockheed Xxxxxx or its Affiliates has or may have an insurable interest with respect to the Business, the Transferred Assets, any of the Assumed Liabilities or any facilities the possession of which will be transferred to Newco at the Closing.before
(d) Newco and the Purchasers Parent, TTSI and, prior to Closing, Buyer agree that, not later than September 30, 1997, and in a manner reasonably satisfactory to Lockheed Xxxxxx, Newco will that they shall in good faith seek to obtain the release Lockheed Xxxxxx of Parent and its Affiliates from all obligations under all Financial Support Arrangements maintained by Lockheed Xxxxxx Parent or any of its Affiliates in connection with TTSI or the TTS Business.
(e) Lockheed Xxxxxx will use reasonable commercial efforts to cause each Financial Support Arrangement to remain in full force and effect in accordance with its terms until the earliest of (i) the date (the "Release Date") on which Newco ensures that Lockheed and its Affiliates are released from all obligations of Lockheed Xxxxxx and its Affiliates under such Financial Support Arrangement in accordance with Section 8.03(d), (ii) September 30, 1997 and (iii) the date such Financial Support Arrangement terminates in accordance with its terms. After the Closing Date and prior to the Release Date for any such Financial Support Arrangement, Lockheed Xxxxxx will not waive any requirements of or agree to amend such Financial Support Arrangement without the prior written consent of Newco.
(f) If, at any time after the Closing Date, (i) any amounts are drawn on or paid under any Financial Support Arrangement where Lockheed Xxxxxx Parent or any of its Affiliates is obligated to reimburse the Person making such payment or (ii) Lockheed Xxxxxx Parent or any of its Affiliates pays any amounts under, or any fees, costs or expenses relating to, any Financial Support Arrangement, Newco TTSI shall indemnify and hold Parent and its Affiliates harmless and pay Lockheed Xxxxxx Parent such amounts promptly after receipt from Lockheed Xxxxxx Parent of notice thereof accompanied by written evidence of the underlying payment obligation.
(g) In the event that Newco fails to ensure that Lockheed Xxxxxx and its Affiliates are released from all obligations under the Financial Support Arrangements not later than September 30, 1997, Newco shall either (i) promptly deposit with Lockheed Xxxxxx xxxx in an amount equal to the aggregate principal or stated amount, as may be applicable, of the Financial Support Arrangements not so released or (ii) provide back-up letters of credit in form and substance reasonably satisfactory to Lockheed Xxxxxx with respect to such Financial Support Arrangements; provided that if Newco has used reasonable commercial efforts to structure its financing arrangements to permit it to comply with the foregoing obligations, Newco shall not be required to take any action under this Section 8.03(g) that it is prohibited from taking under the terms of any financing agreements of Newco in effect on the Closing Date. Any cash deposited with Lockheed Xxxxxx in accordance with clause (i) shall be held by Lockheed Xxxxxx in a segregated interest-bearing account and shall be used by Lockheed Xxxxxx solely to satisfy its payment obligations in respect of such Financial Support Arrangements, and the unused portion of any cash (including interest) relating to a Financial Support Arrangement shall be returned to Newco promptly after the occurrence of the Release Date with respect to, or any other termination of, the Financial Support Arrangement.
(h) In the event that Newco fails to ensure that Lockheed Xxxxxx and its Affiliates are released from all obligations of Lockheed Xxxxxx and its Affiliates under the Disclosed Financial Support Arrangements not later than September 30, 1997, whether as a result of the proviso to the first sentence of Section 8.03(g) or otherwise, and to the extent that Newco has not provided the deposits or letters of credit contemplated by the first sentence of Section 8.03(g), on October 1, 1997 and on the first day of each calendar quarter thereafter Newco agrees to pay to Lockheed Xxxxxx an amount equal to (i) .3125% of the maximum aggregate potential liability of Lockheed Xxxxxx and its Affiliates under such Disclosed Financial Support Arrangements in the case of performance-related Disclosed Financial Support Arrangements or (ii) .625% of the maximum aggregate potential liability of Lockheed Xxxxxx and its Affiliates under such Disclosed Financial Support Arrangements in the case of all other Disclosed Financial Support Arrangements (other than Disclosed Financial Support Arrangements that constitute non-monetary performance guarantees or similar non-monetary obligations) that have not been released or otherwise secured by the deposits or letters of credit contemplated by the first sentence of Section 8.03(g) (determined as of the last day of the preceding calendar quarter). Any such payment by Newco shall be due and payable on October 1, 1997 or on the first day of the applicable calendar month thereafter, and shall be nonrefundable regardless of any subsequent reduction of the liability of Lockheed Xxxxxx or any of its Affiliates thereunder.
Appears in 1 contract
Samples: Reorganization, Recapitalization and Stock Purchase Agreement (True Temper Sports Inc)
Insurance; Financial Support Arrangements. (a) Newco Buyer acknowledges and the Purchasers acknowledge and agree agrees that as of the Closing Date, neither NewcoBuyer, the Business or any of the Business UnitsHPG Business, any property owned or leased by any of the foregoing nor any of the directors, officers, employees (including, without limitation, the Transferred Employees) or agents of any of the foregoing will be insured under any insurance policies maintained by Lockheed Xxxxxx Seller or any of its Affiliates, except (i) in the case of certain claims made policies, to the extent that a claim has been reported as of the Closing Date, (ii) in the case of a policy that is an occurrence policy, to the extent the accident, event or occurrence that results in an insurable loss occurs prior to the Closing Date and has been, is or will be reported or noticed to the respective carrier by Newco Buyer or any of the Lockheed Xxxxxx Companies Seller Company in accordance with the requirements of such policies (which claims Lockheed Xxxxxx Seller shall, at NewcoBuyer's cost and expense, pursue diligently on NewcoBuyer's behalf and the net proceeds of which claims (except to the extent they relate to Excluded Liabilities) shall be remitted promptly to Newco Buyer upon receipt thereof), and (iii) as otherwise provided in Exhibit G D or agreed to in writing by the parties. Except as otherwise provided in Exhibit G D or as otherwise may be agreed to in writing by the parties, from and after the Closing Date, Lockheed Xxxxxx Seller shall have no obligation of any kind to maintain any form of insurance covering all or any part of the Transferred Assets, the HPG Business or the Transferred Employees.
(b) Newco From and after the Closing Date, Buyer agrees to reimburse Lockheed Xxxxxx Seller within 30 days of receipt of an invoice for the items set forth below.
(i) The allocated cost to the Business of premiums, costs and expenses (excluding Lockheed Xxxxxx risk management department costs and expenses), including general and administrative charges, for all periods prior to the Closing Date in respect of any and all insurance policies that cover or covered the Business, whether or not a claim has been made or ever will be made by the Business or Newco under such policies. The "allocated cost" to the Business shall be determined by Lockheed Xxxxxx in a manner consistent with prior practices and in conjunction with the Cost Disclosure Statement filed by Lockheed Xxxxxx or any of its Affiliates and their predecessors with the U.S. Government on the portion of the period covered by the respective policies that ends prior to the Closing Date, except that with respect to policies for which no premium rebate or refund is available as a result of the consummation of the Contemplated Transactions, the "allocated cost" to the Business shall be based on the entire policy period. Newco and the Purchasers understand that Lockheed Xxxxxx is in the process of reviewing with the U.S. Government the methodology used by Lockheed Xxxxxx and its Affiliates to allocate premiums, costs, expenses and reserves to various businesses and divisions, including the Business Units, and acknowledge that any changes to such allocation methodology may result in retroactive adjustments to the allocated cost to the Business of premiums, costs and expenses. In the event of any such change to the allocation methodology, Lockheed Xxxxxx and Newco agree to adjust the allocated costs to the Business (either through a special charge or credit to Newco under this Section 8.03(b)(i)) as appropriate.
(ii) Any self insurance, retention, deductible, retrospective premium, cash payment for reserves calculated or charged on an incurred loss basis and similar items, including but not limited to associated administrative expenses and allocated loss adjustment or similar expenses (collectively, "Insurance Liabilities") allocated to the HPG Business by Lockheed Xxxxxx Seller on a basis consistent with past practices resulting from or arising under any and all current or former insurance policies maintained by Lockheed Xxxxxx Seller or any of its Affiliates to the extent that such Insurance Liabilities relate to or arise out of the Business Assumed Liabilities or any activities of NewcoBuyer. Newco Buyer agrees that, to the extent any of the insurers under the insurance policies, in accordance with the terms of the insurance policies, requests or requires collateral, deposits or other security to be provided with respect to claims made against such insurance policies relating to or arising from the BusinessAssumed Liabilities, Newco will Buyer shall provide the collateral, deposits or other security or, upon request of Lockheed XxxxxxSeller, xxxx will replace any collateral, deposits or other security provided by Lockheed Xxxxxx Seller or any of its Affiliates.
(c) Newco Buyer agrees that, for a period of at least six years commencing on the Closing Date, to the extent it maintains product liability or similar insurance coverage, Newco Buyer will use reasonable efforts (at Lockheed Xxxxxx'x Seller's cost to the extent of any additional cost therefor, provided that, in the event there will be such a cost, Newco Buyer will give Lockheed Xxxxxx Seller a reasonable period of time to determine whether it desires to incur such cost before Newco Buyer commits to such coverage with respect to Lockheed XxxxxxSeller) to include Lockheed Xxxxxx Seller and its Affiliates as an additional insured/loss payee on any such policies in respect of which Lockheed Xxxxxx Seller or its Affiliates has or may have an insurable interest with respect to the HPG Business, the Transferred Assets, any of the Assumed Liabilities or any facilities the possession of which will be transferred to Newco Buyer at the Closing. Seller agrees, for a period of six years commencing on the Closing Date, to include Buyer Companies as additional insured/loss payees on any product liability policies or similar insurance coverage of Seller (at Buyer's cost to the extent of any additional cost therefor, provided that, in the event there will be such a cost, Seller will give Buyer a reasonable period of time to determine whether it desires to incur such cost before Seller commits to such coverage with respect to Buyer) as to all claims or occurrences that constitute Excluded Liabilities.
(d) Newco and the Purchasers agree Buyer agrees that, not later than September 30December 31, 19971998, and in a manner reasonably satisfactory to Lockheed XxxxxxSeller, Newco will Buyer shall in good faith seek to release Lockheed Xxxxxx Seller and its Affiliates from all obligations under all Financial Support Arrangements maintained by Lockheed Xxxxxx or any of its Affiliates in connection with the BusinessArrangements.
(e) Lockheed Xxxxxx will use reasonable commercial efforts to cause each Financial Support Arrangement to remain in full force and effect in accordance with its terms until the earliest of (i) the date (the "Release Date") on which Newco ensures that Lockheed and its Affiliates are released from all obligations of Lockheed Xxxxxx and its Affiliates under such Financial Support Arrangement in accordance with Section 8.03(d), (ii) September 30, 1997 and (iii) the date such Financial Support Arrangement terminates in accordance with its terms. After the Closing Date and prior to the Release Date for any such Financial Support Arrangement, Lockheed Xxxxxx will not waive any requirements of or agree to amend such Financial Support Arrangement without the prior written consent of Newco.
(f) If, at any time after the Closing Date, (i) any amounts are drawn on or paid under any Financial Support Arrangement where Lockheed Xxxxxx Seller or any of its Affiliates is obligated to reimburse the Person making such payment or (ii) Lockheed Xxxxxx Seller or any of its Affiliates pays any amounts under, or any fees, costs or expenses relating to, any such Financial Support Arrangement, Newco Buyer shall pay Lockheed Xxxxxx Seller such amounts promptly after receipt from Lockheed Xxxxxx Seller of notice thereof accompanied by written evidence of the underlying payment obligationobligation and payment thereof.
(gf) In the event that Newco Buyer fails to ensure that Lockheed Xxxxxx Seller and its Affiliates are unconditionally released from all obligations under the Financial Support Arrangements not later than September 30December 31, 19971998, Newco Buyer shall either (i) promptly deposit with Lockheed Xxxxxx xxxx Seller cash in an amount equal to the aggregate principal or stated amount, as may be applicable, of the Financial Support Arrangements not so released or (ii) provide back-up letters of credit issued by one or more commercial banks reasonably satisfactory to Seller, payable to Seller in such aggregate principal or stated amount and otherwise in form and substance reasonably satisfactory to Lockheed Xxxxxx Seller with respect to such Financial Support Arrangements; provided that if Newco has used reasonable commercial efforts to structure its financing arrangements to permit it to comply with the foregoing obligations, Newco shall not be required to take any action under this Section 8.03(g) that it is prohibited from taking under the terms of any financing agreements of Newco in effect on the Closing Date. Any cash deposited with Lockheed Xxxxxx Seller in accordance with clause (i) shall be held by Lockheed Xxxxxx Seller in a segregated interest-bearing account and shall be used by Lockheed Xxxxxx Seller solely to satisfy its payment obligations in respect of such Financial Support Arrangements, and the unused portion of any cash (including interest) relating to a Financial Support Arrangement so deposited with Seller shall be returned to Newco Buyer promptly after following the occurrence release of the Release Date Seller Companies with respect to, or any other termination of, the Financial Support Arrangement.
(h) In the event that Newco fails to ensure that Lockheed Xxxxxx and its Affiliates are released from all obligations of Lockheed Xxxxxx and its Affiliates under the Disclosed Financial Support Arrangements not later than September 30, 1997, whether as a result of the proviso to the first sentence of Section 8.03(g) or otherwise, and to the extent that Newco has not provided the deposits or letters of credit contemplated by the first sentence of Section 8.03(g), on October 1, 1997 and on the first day of each calendar quarter thereafter Newco agrees to pay to Lockheed Xxxxxx an amount equal to (i) .3125% of the maximum aggregate potential liability of Lockheed Xxxxxx and its Affiliates under such Disclosed Financial Support Arrangements in the case of performance-related Disclosed Financial Support Arrangements or (ii) .625% of the maximum aggregate potential liability of Lockheed Xxxxxx and its Affiliates under such Disclosed Financial Support Arrangements in the case of all other Disclosed Financial Support Arrangements (other than Disclosed Financial Support Arrangements that constitute non-monetary performance guarantees or similar non-monetary obligations) that have not been released or otherwise secured by the deposits or letters of credit contemplated by the first sentence of Section 8.03(g) (determined as of the last day of the preceding calendar quarter). Any such payment by Newco shall be due and payable on October 1, 1997 or on the first day of the applicable calendar month thereafter, and shall be nonrefundable regardless of any subsequent reduction of the liability of Lockheed Xxxxxx or any of its Affiliates thereunder.
Appears in 1 contract
Insurance; Financial Support Arrangements. (a) Newco Buyer acknowledges and the Purchasers acknowledge and agree agrees that as of the Closing Date, neither NewcoBuyer, the Business or any of the Business UnitsHPG Business, any property owned or leased by any of the foregoing nor any of the directors, officers, employees (including, without limitation, the Transferred Employees) or agents of any of the foregoing will be insured under any insurance policies maintained by Lockheed Xxxxxx Seller or any of its Affiliates, except (i) in the case of certain claims made policies, to the extent that a claim has been reported as of the Closing Date, (ii) in the case of a policy that is an occurrence policy, to the extent the 19 accident, event or occurrence that results in an insurable loss occurs prior to the Closing Date and has been, is or will be reported or noticed to the respective carrier by Newco Buyer or any of the Lockheed Xxxxxx Companies Seller Company in accordance with the requirements of such policies (which claims Lockheed Xxxxxx Seller shall, at NewcoBuyer's cost and expense, pursue diligently on NewcoBuyer's behalf and the net proceeds of which claims (except to the extent they relate to Excluded Liabilities) shall be remitted promptly to Newco Buyer upon receipt thereof), and (iii) as otherwise provided in Exhibit G D or agreed to in writing by the parties. Except as otherwise provided in Exhibit G D or as otherwise may be agreed to in writing by the parties, from and after the Closing Date, Lockheed Xxxxxx Seller shall have no obligation of any kind to maintain any form of insurance covering all or any part of the Transferred Assets, the HPG Business or the Transferred Employees.
(b) Newco From and after the Closing Date, Buyer agrees to reimburse Lockheed Xxxxxx Seller within 30 days of receipt of an invoice for the items set forth below.
(i) The allocated cost to the Business of premiums, costs and expenses (excluding Lockheed Xxxxxx risk management department costs and expenses), including general and administrative charges, for all periods prior to the Closing Date in respect of any and all insurance policies that cover or covered the Business, whether or not a claim has been made or ever will be made by the Business or Newco under such policies. The "allocated cost" to the Business shall be determined by Lockheed Xxxxxx in a manner consistent with prior practices and in conjunction with the Cost Disclosure Statement filed by Lockheed Xxxxxx or any of its Affiliates and their predecessors with the U.S. Government on the portion of the period covered by the respective policies that ends prior to the Closing Date, except that with respect to policies for which no premium rebate or refund is available as a result of the consummation of the Contemplated Transactions, the "allocated cost" to the Business shall be based on the entire policy period. Newco and the Purchasers understand that Lockheed Xxxxxx is in the process of reviewing with the U.S. Government the methodology used by Lockheed Xxxxxx and its Affiliates to allocate premiums, costs, expenses and reserves to various businesses and divisions, including the Business Units, and acknowledge that any changes to such allocation methodology may result in retroactive adjustments to the allocated cost to the Business of premiums, costs and expenses. In the event of any such change to the allocation methodology, Lockheed Xxxxxx and Newco agree to adjust the allocated costs to the Business (either through a special charge or credit to Newco under this Section 8.03(b)(i)) as appropriate.
(ii) Any self insurance, retention, deductible, retrospective premium, cash payment for reserves calculated or charged on an incurred loss basis and similar items, including but not limited to associated administrative expenses and allocated loss adjustment or similar expenses (collectively, "Insurance Liabilities") allocated to the HPG Business by Lockheed Xxxxxx Seller on a basis consistent with past practices resulting from or arising under any and all current or former insurance policies maintained by Lockheed Xxxxxx Seller or any of its Affiliates to the extent that such Insurance Liabilities relate to or arise out of the Business Assumed Liabilities or any activities of NewcoBuyer. Newco Buyer agrees that, to the extent any of the insurers under the insurance policies, in accordance with the terms of the insurance policies, requests or requires collateral, deposits or other security to be provided with respect to claims made against such insurance policies relating to or arising from the BusinessAssumed Liabilities, Newco will Buyer shall provide the collateral, deposits or other security or, upon request of Lockheed XxxxxxSeller, xxxx will replace any collateral, deposits or other security provided by Lockheed Xxxxxx Seller or any of its Affiliates.
(c) Newco Buyer agrees that, for a period of at least six years commencing on the Closing Date, to the extent it maintains product liability or similar insurance coverage, Newco Buyer will use reasonable efforts (at Lockheed Xxxxxx'x Seller's cost to the extent of any additional cost therefor, provided that, in the event there will be such a cost, Newco Buyer will give Lockheed Xxxxxx Seller a reasonable period of time to determine whether it desires to incur such cost before Newco Buyer commits to such coverage with respect to Lockheed XxxxxxSeller) to include Lockheed Xxxxxx Seller and its Affiliates as an additional insured/loss payee on any such policies in respect of which Lockheed Xxxxxx Seller or its Affiliates has or may have an insurable interest with respect to the HPG Business, the Transferred Assets, any of the Assumed Liabilities or any facilities the possession of which will be transferred to Newco Buyer at the Closing. Seller agrees, for a period of six years commencing on the Closing Date, to include Buyer Companies as additional insured/loss payees on any product liability policies or similar insurance coverage of Seller (at Buyer's cost to the extent of any additional cost therefor, provided that, in the event there will be such a cost, Seller will give Buyer a reasonable period of time to determine whether it desires to incur such cost before Seller commits to such coverage with respect to Buyer) as to all claims or occurrences that constitute Excluded Liabilities.
(d) Newco and the Purchasers agree Buyer agrees that, not later than September 30December 31, 19971998, and in a manner reasonably satisfactory to Lockheed XxxxxxSeller, Newco will Buyer shall in good faith seek to release Lockheed Xxxxxx Seller and its Affiliates from all obligations under all Financial Support Arrangements maintained by Lockheed Xxxxxx or any of its Affiliates in connection with the BusinessArrangements.
(e) Lockheed Xxxxxx will use reasonable commercial efforts to cause each Financial Support Arrangement to remain in full force and effect in accordance with its terms until the earliest of (i) the date (the "Release Date") on which Newco ensures that Lockheed and its Affiliates are released from all obligations of Lockheed Xxxxxx and its Affiliates under such Financial Support Arrangement in accordance with Section 8.03(d), (ii) September 30, 1997 and (iii) the date such Financial Support Arrangement terminates in accordance with its terms. After the Closing Date and prior to the Release Date for any such Financial Support Arrangement, Lockheed Xxxxxx will not waive any requirements of or agree to amend such Financial Support Arrangement without the prior written consent of Newco.
(f) If, at any time after the Closing Date, (i) any amounts are drawn on or paid under any Financial Support Arrangement where Lockheed Xxxxxx Seller or any of its Affiliates is obligated to reimburse the Person making such payment or (ii) Lockheed Xxxxxx Seller or any of its Affiliates pays any amounts under, or any fees, costs or expenses relating to, any such Financial Support Arrangement, Newco Buyer shall pay Lockheed Xxxxxx Seller such amounts promptly after receipt from Lockheed Xxxxxx Seller of notice thereof accompanied by written evidence of the underlying payment obligationobligation and payment thereof.
(gf) In the event that Newco fails to ensure that Lockheed Xxxxxx and its Affiliates are released from all obligations under the Financial Support Arrangements not later than September 30December 31, 19971998, Newco Buyer shall either (i) promptly deposit with Lockheed Xxxxxx xxxx Seller cash in an amount equal to the aggregate principal or stated amount, as may be applicable, of the Financial Support Arrangements not so released or (ii) provide back-up letters of credit issued by one or more commercial banks reasonably satisfactory to Seller, payable to Seller in such aggregate principal or stated amount and otherwise in form and substance reasonably satisfactory to Lockheed Xxxxxx Seller with respect to such Financial Support Arrangements; provided that if Newco has used reasonable commercial efforts to structure its financing arrangements to permit it to comply with the foregoing obligations, Newco shall not be required to take any action under this Section 8.03(g) that it is prohibited from taking under the terms of any financing agreements of Newco in effect on the Closing Date. Any cash deposited with Lockheed Xxxxxx Seller in accordance with clause (i) shall be held by Lockheed Xxxxxx Seller in a segregated interest-bearing account and shall be used by Lockheed Xxxxxx Seller solely to satisfy its payment obligations in respect of such Financial Support Arrangements, and the unused portion of any cash (including interest) relating to a Financial Support Arrangement so deposited with Seller shall be returned to Newco Buyer promptly after following the occurrence release of the Release Date Seller Companies with respect to, or any other termination of, the Financial Support Arrangement.
(h) In the event that Newco fails to ensure that Lockheed Xxxxxx and its Affiliates are released from all obligations of Lockheed Xxxxxx and its Affiliates under the Disclosed Financial Support Arrangements not later than September 30, 1997, whether as a result of the proviso to the first sentence of Section 8.03(g) or otherwise, and to the extent that Newco has not provided the deposits or letters of credit contemplated by the first sentence of Section 8.03(g), on October 1, 1997 and on the first day of each calendar quarter thereafter Newco agrees to pay to Lockheed Xxxxxx an amount equal to (i) .3125% of the maximum aggregate potential liability of Lockheed Xxxxxx and its Affiliates under such Disclosed Financial Support Arrangements in the case of performance-related Disclosed Financial Support Arrangements or (ii) .625% of the maximum aggregate potential liability of Lockheed Xxxxxx and its Affiliates under such Disclosed Financial Support Arrangements in the case of all other Disclosed Financial Support Arrangements (other than Disclosed Financial Support Arrangements that constitute non-monetary performance guarantees or similar non-monetary obligations) that have not been released or otherwise secured by the deposits or letters of credit contemplated by the first sentence of Section 8.03(g) (determined as of the last day of the preceding calendar quarter). Any such payment by Newco shall be due and payable on October 1, 1997 or on the first day of the applicable calendar month thereafter, and shall be nonrefundable regardless of any subsequent reduction of the liability of Lockheed Xxxxxx or any of its Affiliates thereunder.
Appears in 1 contract
Samples: Transaction Agreement (Windmere Durable Holdings Inc)
Insurance; Financial Support Arrangements. (a) Newco and the Purchasers acknowledge and agree that as of the Closing Date, neither Newco, the Business or any of the Business Units, any property owned or leased by any of the foregoing nor any of the directors, officers, employees (including, without limitation, the Transferred Employees) or agents of any of the foregoing will be insured under any insurance policies maintained by Lockheed Xxxxxx Martin or any of its Affiliates, except exxxxx (i) in the case of certain policies, to the extent that a claim has been reported as of the Closing Date, (ii) in the case of a policy that is an occurrence policy, to the extent the accident, event or occurrence that results in an insurable loss occurs prior to the Closing Date and has been, is or will be reported or noticed to the respective carrier by Newco or any of the Lockheed Xxxxxx Martin Companies in accordance with the requirements xxx xequirements of such policies (which claims Lockheed Xxxxxx Martin shall, at Newco's cost and expensexxxxxse, pursue diligently on Newco's behalf and the net proceeds of which claims shall be remitted promptly to Newco upon receipt thereof), and (iii) as otherwise provided in Exhibit G or agreed to in writing by the parties. Except as otherwise provided in Exhibit G or as otherwise may be agreed to in writing by the parties, from and after the Closing Date, Lockheed Xxxxxx Martin shall have no obligation of any ox xxx kind to maintain any form of insurance covering all or any part of the Transferred Assets, the Business or the Transferred Employees.
(b) Newco agrees to reimburse Lockheed Xxxxxx Martin within 30 days of receipt of an invoice xx xxxoice for the items set forth below.
(i) The allocated cost to the Business of premiums, costs and expenses (excluding Lockheed Xxxxxx Martin risk management department costs and cxxxx xnd expenses), including general and administrative charges, for all periods prior to the Closing Date in respect of any and all insurance policies that cover or covered the Business, whether or not a claim has been made or ever will be made by the Business or Newco under such policies. The "allocated cost" to the Business shall be determined by Lockheed Xxxxxx Martin in a manner consistent with prior xxxx xrior practices and in conjunction with the Cost Disclosure Statement filed by Lockheed Xxxxxx Martin or any of its Affiliates Affilixxxx and their predecessors with the U.S. Government on the portion of the period covered by the respective policies that ends prior to the Closing Date, except that with respect to policies for which no premium rebate or refund is available as a result of the consummation of the Contemplated Transactions, the "allocated cost" to the Business shall be based on the entire policy period. Newco and the Purchasers understand that Lockheed Xxxxxx Martin is in the process of reviewing with reviewxxx xxth the U.S. Government the methodology used by Lockheed Xxxxxx Martin and its Affiliates to allocate xxxxxxte premiums, costs, expenses and reserves to various businesses and divisions, including the Business Units, and acknowledge that any changes to such allocation methodology may result in retroactive adjustments to the allocated cost to the Business of premiums, costs and expenses. In the event of any such change to the allocation methodology, Lockheed Xxxxxx Martin and Newco agree to adjust the xxx allocated costs to the Business (either through a special charge or credit to Newco under this Section 8.03(b)(i)) as appropriate.
(ii) Any self insurance, retention, deductible, retrospective premium, cash payment for reserves calculated or charged on an incurred loss basis and similar items, including but not limited to associated administrative expenses and allocated loss adjustment or similar expenses (collectively, "Insurance Liabilities") allocated to the Business by Lockheed Xxxxxx Martin on a basis consistent with past xxxx practices resulting from or arising under any and all current or former insurance policies maintained by Lockheed Xxxxxx Martin or any of its Affiliates to the xxx extent that such Insurance Liabilities relate to or arise out of the Business or any activities of Newco. Newco agrees that, to the extent any of the insurers under the insurance policies, in accordance with the terms of the insurance policies, requests or requires collateral, deposits or other security to be provided with respect to claims made against such insurance policies relating to or arising from the Business, Newco will provide the collateral, deposits or other security or, upon request of Lockheed XxxxxxMartin, xxxx will replace any collateral, deposits or xxxxxxxx xx other security provided by Lockheed Xxxxxx Martin or any of its Affiliates.
(c) Newco agrees that, for a period of at least six years commencing on the Closing Date, to the extent it maintains insurance coverage, Newco will (at Lockheed Xxxxxx'x Martin's cost to the extent of any additional anx xxxxxxonal cost therefor, provided that, in the event there will be such a cost, Newco will give Lockheed Xxxxxx Martin a reasonable period of time to determine xx xxtermine whether it desires to incur such cost before Newco commits to such coverage with respect to Lockheed XxxxxxMartin) include Lockheed Xxxxxx Martin and its Affiliates xxx Xffiliates as an additional addxxxxxxl insured/loss payee on any policies in respect of which Lockheed Xxxxxx Martin or its Affiliates has or may have max xxxe an insurable interest with respect to the Business, the Transferred Assets, any of the Assumed Liabilities or any facilities the possession of which will be transferred to Newco at the Closing.
(d) Newco and the Purchasers agree that, not later than September 30, 1997, and in a manner reasonably satisfactory to Lockheed XxxxxxMartin, Newco will in good faith seek to sxxx xo release Lockheed Xxxxxx Martin and its Affiliates from all obligations xxxxxations under all Financial Support Arrangements maintained by Lockheed Xxxxxx Martin or any of its Affiliates in connection cxxxxxxion with the Business.
(e) Lockheed Xxxxxx Martin will use reasonable commercial efforts commercxxx xfforts to cause each Financial Support Arrangement to remain in full force and effect in accordance with its terms until the earliest of (i) the date (the "Release Date") on which Newco ensures that Lockheed and its Affiliates are released from all obligations of Lockheed Xxxxxx Martin and its Affiliates under such xxxx Financial Support Arrangement in accordance with Section 8.03(d), (ii) September 30, 1997 and (iii) the date such Financial Support Arrangement terminates in accordance with its terms. After the Closing Date and prior to the Release Date for any such Financial Support Arrangement, Lockheed Xxxxxx Martin will not waive any requirements of requiremexxx xx or agree to amend such Financial Support Arrangement without the prior written consent of Newco.
(f) If, after the Closing Date, (i) any amounts are drawn on or paid under any Financial Support Arrangement where Lockheed Xxxxxx Martin or any of its Affiliates is obligated xxxxxxted to reimburse the Person making such payment or (ii) Lockheed Xxxxxx Martin or any of its Affiliates pays any amounts xxx xmounts under, or any fees, costs or expenses relating to, any Financial Support Arrangement, Newco shall pay Lockheed Xxxxxx Martin such amounts promptly after receipt xxxxxxt from Lockheed Xxxxxx Martin of notice thereof accompanied by accompaniex xx written evidence of the underlying payment obligation.
(g) In the event that Newco fails to ensure that Lockheed Xxxxxx Martin and its Affiliates are released from releaxxx xxom all obligations under the Financial Support Arrangements not later than September 30, 1997, Newco shall either (i) promptly deposit with Lockheed Xxxxxx xxxx Martin cash in an amount equal to the aggregate xx xxx xxxxegate principal or stated amount, as may be applicable, of the Financial Support Arrangements not so released or (ii) provide back-up letters of credit in form and substance reasonably satisfactory to Lockheed Xxxxxx Martin with respect to such Financial Support Financixx Xxxport Arrangements; provided that if Newco has used reasonable commercial efforts to structure its financing arrangements to permit it to comply with the foregoing obligations, Newco shall not be required to take any action under this Section 8.03(g) that it is prohibited from taking under the terms of any financing agreements of Newco in effect on the Closing Date. Any cash deposited with Lockheed Xxxxxx Martin in accordance with clause (i) shall xxxll be held by Lockheed Xxxxxx Martin in a segregated interest-bearing account beaxxxx xccount and shall be used by Lockheed Xxxxxx Martin solely to satisfy its payment obligations paymexx xxxigations in respect of such Financial Support Arrangements, and the unused portion of any cash (including interest) relating to a Financial Support Arrangement shall be returned to Newco promptly after the occurrence of the Release Date with respect to, or any other termination of, the Financial Support Arrangement.
(h) In the event that Newco fails to ensure that Lockheed Xxxxxx Martin and its Affiliates are released from releaxxx xxom all obligations of Lockheed Xxxxxx Martin and its Affiliates under the Disclosed Xxxxxosed Financial Support Arrangements not later than September 30, 1997, whether as a result of the proviso to the first sentence of Section 8.03(g) or otherwise, and to the extent that Newco has not provided the deposits or letters of credit contemplated by the first sentence of Section 8.03(g), on October 1, 1997 and on the first day of each calendar quarter thereafter Newco agrees to pay to Lockheed Xxxxxx Martin an amount equal to (i) .3125% of the xx xhe maximum aggregate potential liability of Lockheed Xxxxxx Martin and its Affiliates under such Disclosed sucx Xxsclosed Financial Support Arrangements in the case of performance-related Disclosed Financial Support Arrangements or (ii) .625% of the maximum aggregate potential liability of Lockheed Xxxxxx Martin and its Affiliates under such Disclosed sucx Xxxxlosed Financial Support Arrangements in the case of all other Disclosed Financial Support Arrangements (other than Disclosed Financial Support Arrangements that constitute non-monetary performance guarantees or similar non-monetary obligations) that have not been released or otherwise secured by the deposits or letters of credit contemplated by the first sentence of Section 8.03(g) (determined as of the last day of the preceding calendar quarter). Any such payment by Newco shall be due and payable on October 1, 1997 or on the first day of the applicable calendar month thereafter, and shall be nonrefundable regardless of any subsequent reduction of the liability of Lockheed Xxxxxx Martin or any of its Affiliates thereundertxxxxxxder.
Appears in 1 contract
Insurance; Financial Support Arrangements. (a) Newco Buyer acknowledges and the Purchasers acknowledge and agree agrees that as of the Closing Date, neither Newcothe Buyer Companies, the Business or any of Glass Machinery Share Companies, the Business UnitsGlass Machinery Business, any property owned or leased by any of the foregoing nor any of the directors, officers, employees (including, without limitation, the Transferred Employees) or agents of any of the foregoing will be insured under any insurance policies maintained by Lockheed Xxxxxx Black & Decker or any of its Affiliates, except (i) in the case of certain xxxxxs made policies, to the extent that a claim has been reported as of the Closing Date, (ii) in the case of a policy that is an occurrence policy, to the extent the accident, event or occurrence that results in an insurable loss occurs prior to the Closing Date and has been, is or will be reported or noticed to the respective carrier by Newco a Glass Machinery Unit or any of the Lockheed Xxxxxx Companies Buyer in accordance with the requirements of such policies (which claims Lockheed Xxxxxx Black & Decker shall, at NewcoBuyer's cost and expense, pursue diligently on Newco's behalf Buyxx'x xehalf and the net proceeds of which claims (except to the extent they relate to Excluded Liabilities) shall be remitted promptly to Newco Buyer upon receipt thereof), and (iii) as otherwise provided in Exhibit G D or agreed to in writing by the parties. Except as otherwise provided in Exhibit G D or as otherwise may be agreed to in writing by the parties, from and after the Closing Date, Lockheed Xxxxxx Black & Decker shall have no obligation of any kind to maintain any form of insurance ixxxxxxce covering any of the Glass Machinery Units or all or any part of the Transferred Assets, the Glass Machinery Business or the Transferred Employees, provided that Black & Decker shall reasonably cooperate with the Buyer to permit the Glasx Xxxxinery Business to have the benefit of reasonable uninterrupted insurance coverage.
(b) Newco From and after the Closing Date, Buyer agrees to reimburse Lockheed Xxxxxx Black & Decker within 30 days of receipt of an invoice for the items set forth below.
(i) The allocated cost to the Business of premiums, costs and expenses (excluding Lockheed Xxxxxx risk management department costs and expenses), including general and administrative charges, for all periods prior to the Closing Date in respect of any and all insurance policies that cover or covered the Business, whether or not a claim has been made or ever will be made by the Business or Newco under such policies. The "allocated cost" to the Business shall be determined by Lockheed Xxxxxx in a manner consistent with prior practices and in conjunction with the Cost Disclosure Statement filed by Lockheed Xxxxxx or any of its Affiliates and their predecessors with the U.S. Government on the portion of the period covered by the respective policies that ends prior to the Closing Date, except that with respect to policies for which no premium rebate or refund is available as a result of the consummation of the Contemplated Transactions, the "allocated cost" to the Business shall be based on the entire policy period. Newco and the Purchasers understand that Lockheed Xxxxxx is in the process of reviewing with the U.S. Government the methodology used by Lockheed Xxxxxx and its Affiliates to allocate premiums, costs, expenses and reserves to various businesses and divisions, including the Business Units, and acknowledge that any changes to such allocation methodology may result in retroactive adjustments to the allocated cost to the Business of premiums, costs and expenses. In the event of any such change to the allocation methodology, Lockheed Xxxxxx and Newco agree to adjust the allocated costs to the Business (either through a special charge or credit to Newco under this Section 8.03(b)(i)) as appropriate.
(ii) Any self insurancexxxxxance, retention, deductible, retrospective premium, cash payment for reserves calculated or charged on an incurred loss basis and similar items, including but not limited to associated administrative expenses and allocated loss adjustment or similar expenses (collectively, "Insurance Liabilities") allocated to the Glass Machinery Business by Lockheed Xxxxxx Black & Decker and Black & Decker agrees to pay to Buyer any refunds or credixx xxth respect tx xxxx items on a basis consistent with past practices resulting from or arising under any and all current or former insurance policies maintained by Lockheed Xxxxxx Black & Decker or any of its Affiliates Xxxxxiates to the extent that (i) such Insurance Liabilities relate to or arise out of the Business Assumed Liabilities, liabilities (other than Excluded Liabilities) of a Glass Machinery Share Company or any activities of NewcoBuyer, (ii) relate to a period prior to the Closing and (iii) the past practices reasonably conform with arms' length principles. Newco Buyer agrees that, to the extent any of the insurers under the insurance policies, in accordance with the terms of the insurance policies, requests or requires collateral, deposits or other security to be provided with respect to claims made against such insurance policies relating to or arising from the Businesssuch Insurance Liabilities, Newco will Buyer shall provide the collateral, deposits or other security or, upon request of Lockheed XxxxxxBlack & Decker, xxxx will replace any collateral, deposits or other security provided by Lockheed Xxxxxx provixxx xx Black & Decker or any of its Affiliates.
(c) Newco Buyer agrees that, for a xxx x period of at least six years commencing on the Closing Date, to the extent it maintains product liability or similar insurance coverage, Newco Buyer will (at Lockheed Xxxxxx'x Black & Decker's cost to the extent of any additional cost therefor, provided thatprovidex xxxx, in the event there will be such a cost, Newco Buyer will give Lockheed Xxxxxx Black & Decker a reasonable period of time to determine whether it desires to incur tx xxxxr such cost before Newco Buyer commits to such coverage with respect to Lockheed XxxxxxBlack & Decker) include Lockheed Xxxxxx Black & Decker and its Affiliates as an additional insuredinxxxxxx/loss payee payees on any xxxx policies in respect of which Lockheed Xxxxxx Black & Decker or its Affiliates has or may have an insurable interest with respect witx xxxpect to the Glass Machinery Business, the Transferred Assets, any of the Assumed Liabilities or any facilities the possession of which will be transferred transferred, directly or indirectly, to Newco Buyer at the Closing.
(d) Newco and the Purchasers agree Buyer agrees that, not later than September 30December 31, 19971998, and in a manner reasonably satisfactory to Lockheed XxxxxxBlack & Decker, Newco will Buyer shall in good faith seek to release Lockheed Xxxxxx Black & Decker and its xxx Affiliates from all obligations under all Financial Support Financiax Xxxport Arrangements maintained by Lockheed Xxxxxx Black & Decker or any of its Affiliates in connection with the BusinessGlass Machinexx Xxsiness; provided that this obligation to release shall extend only to Financial Support Arrangements which are listed in paragraph (a)(v) of Schedule B.12.
(e) Lockheed Xxxxxx will use reasonable commercial efforts to cause each Financial Support Arrangement to remain in full force and effect in accordance with its terms until the earliest of (i) the date (the "Release Date") on which Newco ensures that Lockheed and its Affiliates are released from all obligations of Lockheed Xxxxxx and its Affiliates under such Financial Support Arrangement in accordance with Section 8.03(d), (ii) September 30, 1997 and (iii) the date such Financial Support Arrangement terminates in accordance with its terms. After the Closing Date and prior to the Release Date for any such Financial Support Arrangement, Lockheed Xxxxxx will not waive any requirements of or agree to amend such Financial Support Arrangement without the prior written consent of Newco.
(f) If, at any time after the Closing Date, (i) any amounts are drawn on or paid under any Financial Support Arrangement referred to in Section 6.03(d) where Lockheed Xxxxxx Black & Decker or any of its Affiliates is obligated to reimburse the Person making xxxxng such payment or (ii) Lockheed Xxxxxx Black & Decker or any of its Affiliates pays any amounts under, or any feesfeex, costs xxsts or expenses relating to, any such Financial Support Arrangement, Newco Buyer shall pay Lockheed Xxxxxx Black & Decker such amounts promptly after receipt from Lockheed Xxxxxx Black & Decker of notice xxxxxe thereof accompanied by written evidence of the underlying unxxxxxxng payment obligation.
(gf) In the event that Newco Buyer fails to ensure that Lockheed Xxxxxx Black & Decker and its Affiliates are unconditionally released from all obligations obligxxxxxx under the Financial Support Arrangements referred to in Section 6.03(d) not later than September 30December 31, 19971998, Newco Buyer shall either (i) promptly deposit with Lockheed Xxxxxx xxxx Black & Decker cash in an amount equal to the aggregate principal or stated amountxxxxxx, as may be applicable, of the such Financial Support Arrangements not so released or (ii) provide back-up letters of credit issued by one or more commercial banks reasonably satisfactory to Black & Decker, payable to Black & Decker in form such aggregate principal or xxxxxd amount and otherwise xx xxrm and substance reasonably satisfactory to Lockheed Xxxxxx Black & Decker with respect to such Financial Support Arrangements; provided that if Newco has used reasonable commercial efforts to structure its financing arrangements to permit it to comply with the foregoing obligations, Newco shall not be required to take any action under this Section 8.03(g) that it is prohibited from taking under the terms of any financing agreements of Newco in effect on the Closing Date. Any cash deposited with Lockheed Xxxxxx Black & Decker in accordance with clause (i) shall be held by Lockheed Xxxxxx in Black & Deckex xx a segregated interest-bearing account and shall be used by Lockheed Xxxxxx usex xx Xlack & Decker solely to satisfy its payment obligations in respect of such Financial sxxx Xxnancial Support Arrangements, and the unused portion of any cash (including interest) relating to a Financial Support Arrangement shall be returned to Newco Buyer promptly after following the occurrence release of the Release Date Black & Decker and its Affiliates with respect to, or any other termination ofterminatixx xx, the Financial Support Arrangement.
(h) In the event that Newco fails to ensure that Lockheed Xxxxxx and its Affiliates are released from all obligations of Lockheed Xxxxxx and its Affiliates under the Disclosed Financial Support Arrangements not later than September 30, 1997, whether as a result of the proviso to the first sentence of Section 8.03(g) or otherwise, and to the extent that Newco has not provided the deposits or letters of credit contemplated by the first sentence of Section 8.03(g), on October 1, 1997 and on the first day of each calendar quarter thereafter Newco agrees to pay to Lockheed Xxxxxx an amount equal to (i) .3125% of the maximum aggregate potential liability of Lockheed Xxxxxx and its Affiliates under such Disclosed Financial Support Arrangements in the case of performance-related Disclosed Financial Support Arrangements or (ii) .625% of the maximum aggregate potential liability of Lockheed Xxxxxx and its Affiliates under such Disclosed Financial Support Arrangements in the case of all other Disclosed Financial Support Arrangements (other than Disclosed Financial Support Arrangements that constitute non-monetary performance guarantees or similar non-monetary obligations) that have not been released or otherwise secured by the deposits or letters of credit contemplated by the first sentence of Section 8.03(g) (determined as of the last day of the preceding calendar quarter). Any such payment by Newco shall be due and payable on October 1, 1997 or on the first day of the applicable calendar month thereafter, and shall be nonrefundable regardless of any subsequent reduction of the liability of Lockheed Xxxxxx or any of its Affiliates thereunder.
Appears in 1 contract
Insurance; Financial Support Arrangements. (a) Newco Buyer acknowledges and the Purchasers acknowledge and agree agrees that as of the Closing Date, neither NewcoBuyer, any Buyer Company, the Business or any of the Business UnitsBusiness, any property owned or leased by any of the foregoing nor foregoing, any of the directors, officers, employees (including, without limitation, including the Transferred Employees) or agents of any of the foregoing nor the Transferred Assets or Managed Transponder Contract Assets will be insured under any insurance policies maintained by Lockheed Xxxxxx Seller Companies or any of its their Affiliates, except (i) in the case of certain policies, to the extent that a claim has been reported as of the Closing Date, (ii) in the case of a policy that is an occurrence policy, to the extent the accident, event or occurrence that results in an insurable loss occurs prior to the Closing Date and has been, is or will be reported or noticed to the respective carrier by Newco or any of the Lockheed Xxxxxx Companies in accordance with the requirements of such policies (which claims Lockheed Xxxxxx shall, at Newco's cost and expense, pursue diligently on Newco's behalf and the net proceeds of which claims shall be remitted promptly to Newco upon receipt thereof), and (iii) as otherwise provided in Exhibit G or agreed to in writing by the parties. Except as otherwise provided in Exhibit G D or as otherwise may be agreed to in writing by the partiesParties, from and after the Closing Date, Lockheed Xxxxxx Seller Companies shall have no obligation of any kind to maintain any form of insurance covering all or any part of the Transferred Assets or Managed Transponder Contract Assets, the Business or the Transferred Employees.
(b) Newco Buyer agrees to reimburse Lockheed Xxxxxx within 30 days of receipt of an invoice for the items set forth below.
(i) The allocated cost to the Business of premiums, costs and expenses (excluding Lockheed Xxxxxx risk management department costs and expenses), including general and administrative charges, for all periods prior to the Closing Date in respect of any and all insurance policies that cover or covered the Business, whether or not a claim has been made or ever will be made by the Business or Newco under such policies. The "allocated cost" to the Business shall be determined by Lockheed Xxxxxx in a manner consistent with prior practices and in conjunction with the Cost Disclosure Statement filed by Lockheed Xxxxxx or any of its Affiliates and their predecessors with the U.S. Government on the portion of the period covered by the respective policies that ends prior to the Closing Date, except that with respect to policies for which no premium rebate or refund is available as a result of the consummation of the Contemplated Transactions, the "allocated cost" to the Business shall be based on the entire policy period. Newco and the Purchasers understand that Lockheed Xxxxxx is in the process of reviewing with the U.S. Government the methodology used by Lockheed Xxxxxx and its Affiliates to allocate premiums, costs, expenses and reserves to various businesses and divisions, including the Business Units, and acknowledge that any changes to such allocation methodology may result in retroactive adjustments to the allocated cost to the Business of premiums, costs and expenses. In the event of any such change to the allocation methodology, Lockheed Xxxxxx and Newco agree to adjust the allocated costs to the Business (either through a special charge or credit to Newco under this Section 8.03(b)(i)) as appropriate.
(ii) Any self insurance, retention, deductible, retrospective premium, cash payment for reserves calculated or charged on an incurred loss basis and similar items, including but not limited to associated administrative expenses and allocated loss adjustment or similar expenses (collectively, "Insurance Liabilities") allocated to the Business by Lockheed Xxxxxx on a basis consistent with past practices resulting from or arising under any and all current or former insurance policies maintained by Lockheed Xxxxxx or any of its Affiliates to the extent that such Insurance Liabilities relate to or arise out of the Business or any activities of Newco. Newco agrees that, to the extent any of the insurers under the insurance policies, in accordance with the terms of the insurance policies, requests or requires collateral, deposits or other security to be provided with respect to claims made against such insurance policies relating to or arising from the Business, Newco will provide the collateral, deposits or other security or, upon request of Lockheed Xxxxxx, xxxx replace any collateral, deposits or other security provided by Lockheed Xxxxxx or any of its Affiliates.
(c) Newco agrees that, for a period of at least six years commencing on the Closing Date, to the extent it maintains insurance coverage, Newco will (at Lockheed Xxxxxx'x cost to the extent of any additional cost therefor, provided that, in the event there will be such a cost, Newco will give Lockheed Xxxxxx a reasonable period of time to determine whether it desires to incur such cost before Newco commits to such coverage with respect to Lockheed Xxxxxx) include Lockheed Xxxxxx and its Affiliates as an additional insured/loss payee on any policies in respect of which Lockheed Xxxxxx or its Affiliates has or may have an insurable interest with respect to the Business, the Transferred Assets, any of the Assumed Liabilities or any facilities the possession of which will be transferred to Newco at the Closing.
(d) Newco and the Purchasers agree that, not later than September 30, 199760 days after the Closing Date, and in a manner reasonably satisfactory to Lockheed XxxxxxSellers, Newco will Buyer shall, and shall cause Buyer Companies to, in good faith seek to release Lockheed Xxxxxx have Seller Companies and its their respective Affiliates released from all obligations under all any Financial Support Arrangements maintained by Lockheed Xxxxxx or any of its Seller Companies or their respective Affiliates in connection with the Business.
. In furtherance of the foregoing, Buyer agrees (ei) Lockheed Xxxxxx will to use reasonable commercial efforts to cause each provide substitute Financial Support Arrangement to remain in full force Arrangements on substantially the same terms and effect in accordance with its terms until conditions as the earliest of (i) the date (the "Release Date") on which Newco ensures that Lockheed and its Affiliates are released from all obligations of Lockheed Xxxxxx and its Affiliates under such Financial Support Arrangement in accordance with Section 8.03(d), (ii) September 30, 1997 and (iii) Arrangements of Seller Companies on or prior to the date such Financial Support Arrangement terminates in accordance with its terms. After 30th day following the Closing Date and prior (ii) to provide financial information concerning Buyer Companies reasonably requested by those Persons for whose benefit the Release Date for any such Financial Support Arrangement, Lockheed Xxxxxx will not waive any requirements of or agree to amend such Financial Support Arrangement without the prior written consent of NewcoArrangements were made.
(fc) If, at any time after the Closing Date, (i) any amounts are drawn on or paid under any Financial Support Arrangement where Lockheed Xxxxxx pursuant to which Seller Companies or any of its their respective Affiliates is are obligated to reimburse the Person making such payment or (ii) Lockheed Xxxxxx Seller Companies or any of its their respective Affiliates pays pay any amounts under, or any fees, costs or expenses relating to, any Financial Support Arrangement, Newco Buyer shall pay Lockheed Xxxxxx reimburse such Seller Companies such amounts promptly after receipt from Lockheed Xxxxxx Seller Companies of notice thereof accompanied by written evidence of the underlying payment obligation.
(gd) In the event that Newco Buyer fails to ensure that Lockheed Xxxxxx obtain the unconditional release of Seller Companies and its their Affiliates are released from all obligations under the Financial Support Arrangements not later than September 3060 days after the Closing Date, 1997, Newco Buyer shall either (i) promptly deposit with Lockheed Xxxxxx xxxx in an amount equal to the aggregate principal or stated amount, as may be applicable, of the Financial Support Arrangements not so released or (ii) provide back-up letters of credit issued by one or more commercial banks reasonably satisfactory to Sellers or other financial assurances reasonably satisfactory to Sellers payable to Sellers in such aggregate principal or stated amount and otherwise in form and substance reasonably satisfactory to Lockheed Xxxxxx Sellers with respect to such Financial Support Arrangements; provided that if Newco has used reasonable commercial efforts to structure its financing arrangements to permit it to comply with .
(e) Notwithstanding the foregoing obligations, Newco shall not be required to take any action under this Section 8.03(g) that it is prohibited from taking under the terms of any financing agreements of Newco in effect on the Closing Date. Any cash deposited with Lockheed Xxxxxx in accordance with clause (i) shall be held by Lockheed Xxxxxx in a segregated interest-bearing account and shall be used by Lockheed Xxxxxx solely to satisfy its payment obligations in respect of such Financial Support Arrangements, and the unused portion of any cash (including interest) relating to a Financial Support Arrangement shall be returned to Newco promptly after the occurrence of the Release Date with respect to, or any other termination ofprovisions of this Agreement, the Financial Support Arrangement.
(h) In the event that Newco fails failure of Sellers to ensure that Lockheed Xxxxxx and its Affiliates are released from all obligations of Lockheed Xxxxxx and its Affiliates under the Disclosed Financial Support Arrangements not later than September 30, 1997, whether as a result of the proviso to the first sentence of Section 8.03(g) or otherwise, and to the extent that Newco has not provided the deposits or letters of credit contemplated by the first sentence of Section 8.03(g), on October 1, 1997 and on the first day of each calendar quarter thereafter Newco agrees to pay to Lockheed Xxxxxx an amount equal to (i) .3125% of the maximum aggregate potential liability of Lockheed Xxxxxx and its Affiliates under such Disclosed include any Financial Support Arrangements in Schedule B.10 shall not constitute a breach of a representation or warranty in Section B.10 and shall have no effect on the case rights, duties and obligations of performance-related Disclosed the parties under this Agreement, except that the obligations of Buyer under this Section 6.03(b) and 6.03(d) in respect of Financial Support Arrangements shall not include an obligation to seek the release of or (iicomply with Section 6.03(b) .625% of the maximum aggregate potential liability of Lockheed Xxxxxx and its Affiliates under such Disclosed 6.03(d) with respect to any Financial Support Arrangements in the case of all other Disclosed Financial Support Arrangements (other than Disclosed Financial Support Arrangements that constitute non-monetary performance guarantees or similar non-monetary obligations) that have not been released or otherwise secured by the deposits or letters of credit contemplated by the first sentence of Section 8.03(g) (determined as of the last day of the preceding calendar quarter). Any such payment by Newco shall be due and payable on October 1, 1997 or existence on the first day date of the applicable calendar month thereafter, and shall be nonrefundable regardless of any subsequent reduction of the liability of Lockheed Xxxxxx or any of its Affiliates thereunderthis Agreement that are not disclosed in Schedule B.10.
Appears in 1 contract
Samples: Transaction Agreement (Intelsat LTD)
