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Exhibit 2
DISTRIBUTION AGREEMENT
by and between
ROCKWELL INTERNATIONAL CORPORATION
and
[ROCKWELL SEMICONDUCTOR SYSTEMS, INC.]
[ ], 1998
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS.................................1
Section 1.01 General.................................1
ARTICLE II THE DISTRIBUTION..........................20
Section 2.01 The Distribution.......................20
Section 2.02 Cooperation Prior to the
Distribution..........................21
Section 2.03 Rockwell Board Action; Conditions
to the Distribution...................22
Section 2.04 Waiver of Conditions...................23
Section 2.05 Disclosure.............................23
ARTICLE III TRANSACTIONS RELATING TO THE
DISTRIBUTION ...........................23
Section 3.01 Intercorporate Reorganization..........23
Section 3.02 Rockwell Group Obligations
Relating to the Semiconductor
Business..............................27
Section 3.03 Intercompany Accounts and
Arrangements..........................28
Section 3.04 Cash Management........................30
Section 3.05 The Semiconductor Board................32
Section 3.06 Resignations; Transfer of Stock
Held as Nominee.......................32
Section 3.07 Company Certificate of
Incorporation and By-Laws;
Rights Plan...........................33
Section 3.08 Insurance..............................34
Section 3.09 Use of Names, Trademarks, etc..........37
Section 3.10 Consents...............................42
Section 3.11 Cross-License of Intellectual
Property..............................43
ARTICLE IV MUTUAL RELEASE; INDEMNIFICATION...........57
Section 4.01 Mutual Release.........................57
Section 4.02 Indemnification by Rockwell............58
Section 4.03 Indemnification by the Company.........59
Section 4.04 Limitations on Indemnification
Obligations...........................61
Section 4.05 Procedures Relating to
Indemnification.......................62
Section 4.06 Remedies Cumulative....................65
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Section 4.07 Survival of Indemnities................66
Section 4.08 Exclusivity of Tax Allocation
Agreement.............................66
ARTICLE V ACCESS TO INFORMATION......................66
Section 5.01 Access to Information..................66
Section 5.02 Production of Witnesses................68
Section 5.03 Retention of Records...................68
Section 5.04 Confidentiality........................69
ARTICLE VI MISCELLANEOUS.............................70
Section 6.01 Entire Agreement; Construction.........70
Section 6.02 Survival of Agreements.................70
Section 6.03 Expenses...............................70
Section 6.04 Governing Law..........................71
Section 6.05 Notices................................71
Section 6.06 Consent to Jurisdiction................73
Section 6.07 Amendments.............................73
Section 6.08 Assignment.............................73
Section 6.09 Captions; Currency.....................74
Section 6.10 Severability...........................74
Section 6.11 Parties in Interest....................74
Section 6.12 Schedules..............................74
Section 6.13 Termination............................75
Section 6.14 Waivers; Remedies......................75
Section 6.15 Further Assurances.....................75
Section 6.16 Counterparts...........................75
Section 6.17 Performance............................75
ANNEXES
Annex A - Employee Matters Agreement
Annex B - Tax Allocation Agreement
SCHEDULES
Schedule 1.1(a) - By-Laws
Schedule 1.1(b) - Certificate of Incorporation
Schedule 1.1(c) - Company Subsidiaries
Schedule 1.1(d) - Semiconductor Bank Accounts
Schedule 1.1(e) - Former Businesses of the Company
Schedule 1.1(f) - Semiconductor Financial Instruments
and Shared Agreements
Schedule 1.1(g) - Semiconductor Litigation
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Schedule 3.1(c) - Reorganization Transactions
Schedule 3.3(a) - Intercompany Accounts
Schedule 3.3(b)(ii) - Intercompany Agreements
Schedule 3.6 - Continuing Directors and Officers
Schedule 3.11(a) - Certain Intellectual Property
Licensed By Rockwell
Schedule 3.11(b) - Certain Intellectual Property
Licensed By the Company
Schedule 4.2 - Certain Form 10 Sections
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DISTRIBUTION AGREEMENT
DISTRIBUTION AGREEMENT (this "Agreement"), dated as of [ ],
1998, by and between ROCKWELL INTERNATIONAL CORPORATION, a Delaware corporation
("Rockwell"), and [ROCKWELL SEMICONDUCTOR SYSTEMS, INC.], a Delaware corporation
and, as of the date hereof, a wholly-owned subsidiary of Rockwell (the
"Company").
WHEREAS, the Rockwell Board (as defined herein) has determined that it
is appropriate and desirable to distribute all outstanding shares of
Semiconductor Common Stock (as defined herein) on a pro rata basis to the
holders of Rockwell Common Stock (as defined herein); and
WHEREAS, Rockwell and the Company have determined that it is
appropriate and desirable to set forth the principal corporate transactions
required to effect such distribution and certain other agreements that will
govern certain matters relating to such distribution;
NOW, THEREFORE, in consideration of the premises and of the respective
agreements and covenants contained in this Agreement, the parties hereby agree
as follows:
ARTICLE I
DEFINITIONS
Section 1.01 General. As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Action" means, with respect to any Person, any actual or threatened or
future action, suit, arbitration, inquiry, proceeding or investigation by or
before any Governmental Entity or any claims or other legal matters that have
been or may be asserted by or against, or otherwise affect, such Person.
"Administrative Services" shall have the meaning ascribed thereto in
Section 3.11(d)(i)(A).
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"Administrative Services Software" shall have the meaning ascribed
thereto in Section 3.11(d)(i)(B).
"Affiliate" means, with respect to any specified Person, any other
Person that directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, such specified
Person; provided, however, that for purposes of this Agreement, following the
Time of Distribution no member of either Group shall be deemed to be an
Affiliate of any member of the other Group. For purposes of the immediately
preceding sentence, the term "control" (including, with correlative meanings,
the terms "controlled by" and "under common control with"), as used with respect
to any Person, means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
whether through ownership of voting securities, by contract or otherwise.
"Agreement" shall have the meaning ascribed thereto in the preamble.
"Ancillary Agreements" means, collectively, the Employee Matters
Agreement, the Tax Allocation Agreement, the Transition Agreement and the
Conveyance and Assumption Instruments.
"Application Software" shall have the meaning ascribed thereto in
Section 3.11(e)(i).
"Assets" means any and all assets, properties and rights, whether
tangible or intangible, real, personal or mixed, fixed, contingent or otherwise,
and wherever located (other than ownership interests in Subsidiaries),
including, without limitation, the following:
(i) real property interests (including, without limitation,
leases), land, plants, buildings and improvements;
(ii) machinery, equipment, tooling, vehicles, furniture and
fixtures, leasehold improvements, repair parts, tools, plant,
laboratory and office equipment and supplies, computer hardware and
software, computer networking equipment, engineering and design
equipment, test equipment and other
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tangible personal property, together with any rights or claims arising
out of maintenance or service contracts relating thereto or the breach
of any express or implied warranty by the manufacturers or sellers of
any of such assets or any component part thereof;
(iii) inventories, including, without limitation, raw
materials, work-in-process, materials, components, finished goods,
parts, accessories and supplies;
(iv) cash, bank accounts, notes, short-term and long-term
investments, accounts, loans and notes receivable (whether current or
not current), interests as beneficiary under letters of credit,
advances and performance and surety bonds;
(v) certificates of deposit, banker's acceptances, shares of
stock, bonds, debentures, evidences of indebtedness, certificates of
interest or participation in profit-sharing agreements,
collateral-trust certificates, preorganization certificates or
subscriptions, transferable shares, investment contracts, voting-trust
certificates, puts, calls, straddles, options, swaps, collars, caps and
other securities or hedging arrangements of any kind;
(vi) financial, accounting, corporate, operating, design,
manufacturing, test and other data and records (in each case, in
whatever form or medium, including, without limitation, electronic
media), including, without limitation, books, records, notes, sales and
sales promotional material and data, advertising materials, credit
information, cost and pricing information, customer and supplier lists,
business plans, reference catalogs, payroll and personnel records and
procedures, blue-prints, research and development files, data and
laboratory books, sales order files, litigation files, minute books,
stock ledgers, stock transfer records and other similar property,
rights and information;
(vii) (A) inventions (whether patentable or unpatentable and
whether or not reduced to practice), all improvements thereto, and all
patents (including, without limitation, utility and design
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patents, industrial designs and utility models), patent applications,
and patent and invention disclosures, and all other rights of
inventorship, worldwide, together with all reissuances, continuations,
continuations-in-part, divisions, revisions, supplementary protection
certificates, extensions and re-examinations thereof; (B) trademarks,
service marks, trade names, trade dress, logos, business and product
names and slogans, any and every other form of trade identity and
registrations and applications for registration thereof, worldwide; (C)
copyrights in copyrightable works, and all other rights of authorship,
worldwide, and all applications (including, without limitation, the
right to file applications), registrations and renewals in connection
therewith; (D) mask works and semiconductor chip rights, worldwide, and
all applications (including, without limitation, the right to file
applications), registrations and renewals in connection therewith; (E)
trade secrets and confidential business and technical information
(including, without limitation, ideas, research and development,
know-how, formulas, technology, compositions, manufacturing and
production processes and techniques, technical data, engineering,
production and other designs, drawings, engineering notebooks,
industrial models, software and specifications and any other
information meeting the definition of a trade secret under the Uniform
Trade Secrets Act); (F) computer and electronic data processing
programs and software, both source code and object code (including,
without limitation, data and related documentation, flow charts,
diagrams, descriptive texts and programs, computer print-outs,
underlying tapes, computer databases and similar items), computer
applications and operating programs; (G) rights to xxx for and remedies
against past, present and future infringements of any or all of the
foregoing and rights of priority and protection of interests therein
under the laws of any jurisdiction worldwide; (H) all copies and
tangible embodiments of any or all of the foregoing (in whatever form
or medium, including, without limitation, electronic media); (I) all
other proprietary and intellectual property rights and interests; and
(J) all other rights relating to any or all of the foregoing;
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(viii) Contracts;
(ix) credits, prepaid expenses, deposits and retentions held
by third parties;
(x) claims, causes of action, choses in action, rights under
express or implied warranties, guarantees, indemnities and similar
rights, rights of recovery, rights of set-off, rights of subrogation
and all other rights of any kind;
(xi) Licenses; and
(xii) goodwill and going concern value.
"Assigning Party" shall have the meaning ascribed thereto in Section
3.10.
"Assumed Rockwell Liabilities" means Liabilities of the Company Group
as of the Time of Distribution which do not constitute Semiconductor Liabilities
and which relate to or arise in connection with any business of Rockwell and the
Rockwell Subsidiaries other than the Semiconductor Business.
"BNA" means Boeing North American, Inc., a Delaware corporation
formerly named Rockwell International Corporation.
"BNA Transition Agreement" means the Transition Agreement dated as of
December 6, 1996 by and among Rockwell, The Boeing Company and BNA, as the same
may be amended.
"Boeing Post-Closing Covenants Agreement" means the Post-Closing
Covenants Agreement dated as of December 6, 1996 among BNA, The Boeing Company,
Boeing NA, Inc. and Rockwell.
"By-Laws" means the Company's by-laws substantially in the form
attached hereto as Schedule 1.1(a).
"Cash" means all cash, cash on hand, cash in transit, cash equivalents,
funds, certificates of deposit, similar instruments and other short-term
investments held by Rockwell and its Subsidiaries and Affiliates (including,
without limitation, members of the
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Company Group) at the Time of Distribution (it being understood that cash
equivalents do not include intercompany cash management balances which will be
eliminated as of the Time of Distribution pursuant to Section 3.03(a)).
"Certificate of Incorporation" means the Company's certificate of
incorporation substantially in the form attached hereto as Schedule 1.1(b).
"Change in Control" means, with respect to any party, any of the
following events or circumstances: (a) any Person or group of Persons (within
the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as
amended) shall either (i) acquire beneficial ownership (within the meaning of
Rule 13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934) of 25% or more of the outstanding shares of voting stock
of the party or (ii) obtain the power (whether or not exercised) to elect a
majority of the party's directors or (b) Continuing Directors shall cease to
constitute a majority of the board of directors of the party.
"Claims Administration" means the processing of claims made under the
Policies, including, without limitation, the reporting of claims to the
insurance carrier, management and defense of claims, and providing for
appropriate releases upon settlement of claims.
"Claims Made Policies" shall have the meaning ascribed thereto in
Section 3.08(a).
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor legislation.
"Commission" means the Securities and Exchange Commission.
"Company" shall have the meaning ascribed thereto in the preamble.
"Company Group" means the Company and the Company Subsidiaries.
"Company Subsidiary" means each Person listed on Schedule 1.1(c) which
is a direct or indirect Subsidiary of the Company as of the Time of
Distribution.
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"Consents" means consents, approvals, waivers, clearances, exemptions,
allowances, novations, authorizations, filings, registrations and notifications.
"Continuing Director" means, with respect to either party, any member
of such party's board of directors who either (i) is a member of such board as
of the Time of Distribution or (ii) is thereafter elected to such board, or
nominated for election by stockholders, by a vote of at least two-thirds of the
directors who are Continuing Directors at the time of such vote; provided that
an individual who is so elected or nominated in connection with a merger,
consolidation, acquisition or similar transaction (but excluding the
Distribution) shall not be a Continuing Director unless such individual was a
Continuing Director prior thereto.
"Contracts" means agreements, leases, contracts, memoranda of
understanding, letters of intent, sales orders, purchase orders, open bids and
other commitments and all rights therein and Liabilities thereunder, including,
without limitation, in each case, all amendments, modifications and supplements
thereto and waivers and consents thereunder.
"Conveyance and Assumption Instruments" means, collectively, the
various agreements, deeds, bills of sale, stock powers, certificates of title,
instruments of conveyance and assignment, instruments of assumption and other
instruments and documents to be entered into to effect the transfer of Assets
and Subsidiaries and the assumption of Liabilities contemplated by the
transactions described in Section 3.01.
"Distribution" means the distribution, on the basis provided for in
Section 2.01, to holders of Rockwell Common Stock of the shares of Semiconductor
Common Stock owned by Rockwell on the Distribution Date.
"Distribution Agent" means the distribution agent selected by Rockwell
to distribute Semiconductor Common Stock in connection with the Distribution.
"Distribution Date" means the date determined by the Rockwell Board as
the date as of which the Distribution will be effected.
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"Employee Matters Agreement" means the Employee Matters Agreement
between Rockwell and the Company, substantially in the form attached hereto as
Annex A.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Form 10" means the registration statement on Form 10 filed by the
Company with the Commission to effect the registration of the Semiconductor
Common Stock pursuant to the Exchange Act, including, without limitation, all
amendments thereto filed by the Company with the Commission prior to the Time of
Distribution.
"Former Business" means any corporation, partnership, entity, division,
business unit, business, assets, plants, product line, operations or contract
(including, without limitation, any assets and liabilities comprising the same)
that has been sold, conveyed, assigned, transferred or otherwise disposed of or
divested (in whole or in part) by any member of the Pre-Distribution Group or
the operations, activities or production of which has been discontinued,
abandoned, completed or otherwise terminated (in whole or in part) by any member
of the Pre-Distribution Group.
"Governmental Entity" means any government or any court, arbitral
tribunal, administrative agency or commission or other governmental or
regulatory authority or agency, Federal, state, local, domestic, foreign or
international.
"Group" means the Rockwell Group or the Company Group.
"Indemnifiable Losses" means, subject to Section 4.04, any and all
losses, Liabilities, claims, damages, deficiencies, obligations, fines,
payments, Taxes, Liens, costs and expenses, matured or unmatured, absolute or
contingent, accrued or unaccrued, liquidated or unliquidated, known or unknown,
whenever arising and whether or not resulting from Third Party Claims
(including, without limitation, the costs and expenses of any and all Actions;
all amounts paid in connection with any demands, assessments, judgments,
settlements and compromises relating thereto; interest and penalties recovered
by a third party with respect thereto; out-of-pocket expenses and reasonable
attorneys', accountants'
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and other experts' fees and expenses reasonably incurred in investigating,
preparing or defending against any such Actions or in asserting, preserving or
enforcing an Indemnitee's rights hereunder; and any losses that may result from
the granting of injunctive relief as a result of any such Actions).
"Indemnifying Party" shall have the meaning ascribed thereto in Section
4.04(a).
"Indemnitee" means any of the Rockwell Indemnitees or the Semiconductor
Indemnitees who or which may seek indemnification under this Agreement.
"Indemnity Reduction Amounts" shall have the meaning ascribed thereto
in Section 4.04(a).
"Information" means all records, books, contracts, instruments,
computer data and other data and information (in each case, in whatever form or
medium, including, without limitation, electronic media).
"Information Statement" means the information statement with respect to
the Company sent to the holders of Rockwell Common Stock in connection with the
Distribution.
"Insurance Proceeds" means monies (a) received by an insured from an
insurance carrier, (b) paid by an insurance carrier on behalf of an insured or
(c) received from any third party in the nature of insurance, contribution or
indemnification in respect of any Liability.
"IRS" means the Internal Revenue Service.
"Japanese Credit Facilities" means (i) the Yen 2.5 billion credit
facility from Industrial Bank of Japan to RSS Japan, (ii) the Yen 4 billion
credit facility from Bank of Tokyo-Mitsubishi to RSS Japan and (iii) any
successor, substitute or replacement credit facilities of any of the foregoing
credit facilities.
"Japanese Debt Amount" means the sum of the aggregate amounts payable
by RSS Japan under all of the Japanese Credit Facilities, including, without
limitation, any accrued interest and fees with respect thereto, as of the Time
of Distribution.
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"Liabilities" means any and all claims, debts, liabilities, commitments
and obligations of whatever nature, whether fixed, contingent or absolute,
matured or unmatured, liquidated or unliquidated, accrued or not accrued, known
or unknown, due or to become due, whenever or however arising (including,
without limitation, those arising out of any contract or tort, whether based on
negligence, strict liability or otherwise) and whether or not the same would be
required by generally accepted accounting principles to be reflected as a
liability in financial statements or disclosed in the notes thereto, including,
without limitation, all costs and expenses relating thereto and those claims,
debts, liabilities, commitments and obligations arising under any law, rule,
regulation, Action, order or consent decree of any Governmental Entity or any
award of any arbitrator of any kind, and those arising under any Contract.
"Licenses" means licenses, permits, authorizations, consents,
certificates, registrations, variances, franchises and other approvals from any
Governmental Entity, including, without limitation, those relating to
environmental matters.
"Lien" means any lien, security interest, pledge, mortgage, charge,
restriction, claim, retention of title agreement or other encumbrance of
whatever nature.
"Meritor" means Meritor Automotive, Inc., a Delaware corporation.
"Meritor Distribution Agreement" means the Distribution Agreement dated
as of September 30, 1997 by and between Rockwell and Meritor.
"Nasdaq" means The Nasdaq Stock Market, Inc. National Market System.
"No-action Letter" means a letter or letters from the staff of the
Commission indicating that the Division of Corporation Finance will not
recommend enforcement action to the Commission if shares of Semiconductor Common
Stock received by the Rockwell Savings Plans in the Distribution (i) are sold by
the Rockwell Savings Plans on behalf of participants in the Rockwell Savings
Plans who are not affiliates of the Company or (ii) are distributed to such
participants and
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sold by them, in each case, without compliance with Rule 144 under the
Securities Act, registration under the Securities Act or compliance with any
other exemption from registration under the Securities Act.
"Occurrence Basis Policies" shall have the meaning ascribed thereto in
Section 3.08(a).
"Ordinary Course Intercompany Arrangements" shall have the meaning
ascribed thereto in Section 3.03(b)(ii).
"Owner" shall have the meaning ascribed thereto in Section 3.11(c)(ii).
"Person" means any individual, partnership, joint venture, corporation,
limited liability entity, trust, unincorporated organization or other entity
(including, without limitation, a Governmental Entity).
"Policies" means all insurance policies and insurance contracts of any
kind of the Pre-Distribution Group which include the Company, the Company
Subsidiaries and/or the Semiconductor Business within the definition of the
named insured and which were or are in effect at any time at or prior to the
Time of Distribution, including, without limitation, primary, excess and
umbrella policies, commercial general liability policies, fiduciary liability,
product liability, automobile, aircraft, property and casualty, directors and
officers liability, workers' compensation and employee dishonesty insurance
policies, bonds and captive insurance company arrangements, together with all
rights, benefits and privileges thereunder.
"Pre-Distribution Group" means (i) each of Rockwell, the Subsidiaries
of Rockwell existing immediately prior to the Time of Distribution (including,
without limitation, members of the Company Group) and the former Subsidiaries of
Rockwell, (ii) each of the predecessors of each of the foregoing (including,
without limitation, BNA) and (iii) each of the present and former Subsidiaries
and other Affiliates of each of the foregoing, and their predecessors.
"Privileged Information" means, with respect to either Group,
Information regarding a member of such Group, or any of its operations,
employees, assets or
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Liabilities (whether in documents or stored in any other form or known to its
employees or agents) that is or may be protected from disclosure pursuant to the
attorney-client privilege, the work product doctrine or other applicable
privileges, that a member of the other Group may come into possession of or
obtain access to pursuant to this Agreement or otherwise.
"Recipient Party" shall have the meaning ascribed thereto in Section
3.10.
"Record Date" means the close of business on the date determined by the
Rockwell Board as the record date for the Distribution.
"Recorded Amount" means, with respect to Cash, the amount recorded by
Rockwell as of the Time of Distribution in accordance with Rockwell's practices
and procedures as in effect on the date hereof. The parties acknowledge that
such practices and procedures include (i) deducting the amount of outstanding
checks for the purposes of determining the Recorded Amount of Cash in non-U.S.
bank accounts and (ii) not deducting the amount of outstanding checks for the
purposes of determining the Recorded Amount of Cash in U.S. bank accounts.
"Representative" means, with respect to any Person, any of such
Person's directors, officers, employees, agents, consultants, advisors,
accountants, attorneys and representatives.
"Rights" means the Rights to be issued pursuant to the Rights Plan.
"Rights Plan" means the rights agreement entered into on or prior to
the Distribution Date between the Company and ChaseMellon Shareholder Services,
L.L.C., as rights agent, substantially in the form filed as an exhibit to the
Form 10.
"Rockwell" shall have the meaning ascribed thereto in the preamble.
"Rockwell Assets" means, collectively, all Assets which immediately
prior to the Time of Distribution are owned by Rockwell or any of its
Subsidiaries (including, without limitation, members of the Company Group),
other than the Semiconductor Assets.
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Anything contained herein to the contrary notwithstanding, Rockwell Retained
Assets shall be included in Rockwell Assets.
"Rockwell Board" means the Board of Directors of Rockwell or a duly
authorized committee thereof.
"Rockwell CLIR Fund" means the Rockwell Continued Life Insurance
Reserve Fund.
"Rockwell Common Stock" means the Common Stock, par value $1.00 per
share, of Rockwell.
"Rockwell Group" means Rockwell and its Affiliates, whether now or
hereafter existing, other than members of the Company Group.
"Rockwell Indemnitees" means Rockwell, each Affiliate of Rockwell,
including the Rockwell Subsidiaries, each of their respective Representatives
and each of the heirs, executors, successors and assigns of any of the
foregoing.
"Rockwell Retained Accounts" means all bank accounts of Rockwell and
its Subsidiaries and Affiliates (including, without limitation, members of the
Company Group), other than Semiconductor Bank Accounts.
"Rockwell Retained Assets" means the following:
(i) all (A) Rockwell Retained Accounts and (B) Cash,
including, without limitation, all Cash contained in the Rockwell
Retained Accounts and the Semiconductor Bank Accounts, except for (i)
Cash in a Recorded Amount equal to the Japanese Debt Amount and (ii)
shares of common stock of Semtech Corporation held by Rockwell and its
Subsidiaries;
(ii) all Policies and all rights therein and related thereto,
other than the benefits of Occurrence Basis Policies and Claims Made
Policies to the extent described in Section 3.08(a);
(iii) all rights in and use of the names, trademarks, trade
names and service marks "Rockwell" and "Rockwell International" and all
corporate symbols and logos related thereto and all names, trademarks,
trade names and service marks which
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include the words "Rockwell" or "Rockwell International" or any
derivative thereof (other than as provided for in Section 3.09);
(iv) all assets with respect to pension plans of Rockwell and
its Subsidiaries (including, without limitation, members of the Company
Group)[, other than as provided for in the Employee Matters Agreement];
(v) all assets of and related to the Rockwell VEBA and the
Rockwell CLIR Fund;
(vi) all Shared Agreements (subject to the provisions of
Section 3.02(c));
(vii) all assets that are used by Rockwell and its
Subsidiaries and Affiliates in providing corporate, insurance and
administrative services to Subsidiaries, divisions or operating units
of the Rockwell Group not included in the Semiconductor Business
(whether or not the same or similar services are provided to the
Semiconductor Business);
(viii) all interests of Rockwell and its Subsidiaries and
Affiliates (including, without limitation, members of the Company
Group) in charitable trusts and assets thereof (it being understood
that such charitable trusts will remain obligated to fund an aggregate
of $[ ] of commitments of such charitable trusts relating to the
Semiconductor Business existing at the Time of Distribution, and that
all other such commitments will constitute Semiconductor Liabilities);
(ix) all rights in U.S. Patent #4,368,098 entitled "Epitaxial
Composite and Method of Making", all license agreements and royalties
with respect to the licensing thereof and all rights to xxx and recover
for and remedies against past, present and future infringements thereof
(including, without limitation, all rights in respect of the Action
Rockwell International Corporation v. United States and SDL, Inc., Civ.
Xx. 00-000 X, X.X. Xxxxx xx Xxxxxxx Xxxxxx); and
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(x) all rights, choses in action, causes of action and claims
arising out of any asset described in clauses (i) through (ix) above.
"Rockwell Savings Plans" means, collectively, (i) the Rockwell
International Corporation Savings Plan, (ii) the Rockwell Retirement Savings
Plan for Certain Employees, (iii) the Xxxxx-Xxxxxxx Savings and Investment Plan
for Salaried Employees, (iv) the Xxxxx-Xxxxxxx Savings and Investment Plan for
Hourly Employees, (v) the Xxxxx-Xxxxxxx Savings and Investment Plan for
Represented Hourly Employees and (vi) the Reliance Electric Company Savings and
Investment Plan.
"Rockwell Science Center" means Rockwell Science Center, LLC, a
Delaware limited liability company.
"Rockwell Subsidiary" means any Subsidiary of Rockwell other than the
Company or any Company Subsidiary.
"Rockwell VEBA" means the Trust for Employee Welfare Benefit Programs
of Rockwell International Corporation.
"RSS Japan" means Rockwell International Japan Kabushiki Kaisha, a
corporation organized under the laws of Japan.
"Securities Act" means the Securities Act of 1933, as amended.
"Semiconductor Assets" means, collectively, all Assets (other than
Rockwell Retained Assets) which immediately prior to the Time of Distribution
are owned by Rockwell or any of its Subsidiaries (including, without limitation,
members of the Company Group) and which are used primarily in or relate
primarily to the Semiconductor Business, as the same shall exist as of such
time, including, without limitation, except as otherwise provided pursuant to
any Transaction Agreement, all assets reflected in the Semiconductor Balance
Sheet, as such assets may have been added to or sold or otherwise changed since
the date thereof. Anything contained herein to the contrary notwithstanding,
Rockwell Retained Assets shall not be included in Semiconductor Assets.
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"Semiconductor Balance Sheet" means the balance sheet of the
Semiconductor Business as of September 30, 1998 contained in the Form 10.
"Semiconductor Bank Accounts" means all bank accounts set forth on
Schedule 1.1(d).
"Semiconductor Board" means the Board of Directors of the Company.
"Semiconductor Business" means (i) the business engaged in at all times
prior to the Time of Distribution by the Pre-Distribution Group of researching,
developing, designing, engineering, manufacturing, building, selling,
distributing, installing, modifying, repairing, servicing and supporting
semiconductor products and systems for communications electronics markets such
as personal computers, personal imaging devices, wireless communications
products, network access devices and digital information and entertainment
products, and activities related thereto, (ii) Former Businesses managed or
operated with any of the foregoing or operationally or otherwise related to any
of the foregoing, including, without limitation, the Former Businesses listed on
Schedule 1.1(e) and (iii) activities related to the foregoing; provided,
however, that the Semiconductor Business shall not include (A) the business
heretofore and currently engaged in by Rockwell's Electronic Commerce Division,
including, without limitation, researching, developing, designing, engineering,
manufacturing, building, selling, distributing, installing, modifying,
repairing, servicing and supporting electronic commerce products for call center
systems and personalized electronic commerce applications or (B) Rockwell's
mechanical filters product line, including, without limitation, the developing,
designing, engineering, manufacturing, building and selling of high performance
electrical bandpass filters (operating in the 3 kilohertz to 500 kilohertz
center frequency range) for HF, UHF and VHF radios, automatic train controls and
wireless communications infrastructure equipment. Notwithstanding anything
contained herein to the contrary, the term "Semiconductor Business" shall not
include Rockwell Science Center (or the operations thereof) or Rockwell's
Automation or Avionics & Communications businesses. The parties acknowledge that
the Semiconductor Business in the past has operated under such names as
Microelectronics Division, North American
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Rockwell Microelectronics Company, Electronic Devices Division, Semiconductor
Products Division, Microelectronics Technology Center, Digital Communications
Division, Rockwell Telecommunications Division, Rockwell Semiconductor Systems
Division, Multimedia Communications Division, Wireless Communications Division,
Personal Computing Products Division, Personal Imaging Products Division,
Digital Infotainment Division and Network Access Division.
"Semiconductor Common Stock" means, collectively, the Common Stock, par
value $1.00 per share, of the Company and the related Rights.
"Semiconductor Financial Instruments" means all credit facilities,
guaranties, foreign currency forward exchange contracts, comfort letters,
letters of credit and similar instruments related to the Semiconductor Business
under which any member of the Rockwell Group has any primary, secondary,
contingent, joint, several or other Liability (other than Shared Agreements),
including, without limitation, those set forth on Schedule 1.1(f).
"Semiconductor Indemnitees" means the Company, each Affiliate of the
Company, including the Company Subsidiaries, each of their respective
Representatives and each of the heirs, executors, successors and assigns of any
of the foregoing.
"Semiconductor Liabilities" means (i) all Liabilities of any member of
the Company Group under any Transaction Agreement to which it is or becomes a
party, (ii) all Liabilities for which any member of the Company Group is made
responsible pursuant to any Transaction Agreement and (iii) all Liabilities
based upon, arising out of, relating to or otherwise in connection with the
Semiconductor Assets or the Semiconductor Business, whether based upon, arising
out of, relating to or otherwise in connection with events, actions,
occurrences, omissions, circumstances or conditions occurring, existing or
asserted before, at or after the Time of Distribution, including, without
limitation: (A) all Liabilities reflected (or of the type reflected) on the
Semiconductor Balance Sheet or described (or of the type described) in the notes
thereto (as such Liabilities may have been reduced or added to or otherwise
changed since the date thereof), (B) all
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Liabilities in respect of checks outstanding as of the Time of Distribution
relating to the Semiconductor Business, (C) all Liabilities in respect of
workers' compensation, automobile, general liability, products liability,
intellectual property liability and other claims and matters (whether direct or
by indemnification of any Person or otherwise) relating to the Semiconductor
Business, (D) all Liabilities in respect of all Actions relating to the
Semiconductor Business, including, without limitation, those Actions set forth
on Schedule 1.1(g) (other than Liabilities described in Section 4.02(g)), (E)
all Liabilities in respect of salary, bonuses, incentive payments, severance
payments and other compensation payments and all Taxes and withholdings related
thereto, (F) except for those Liabilities expressly assumed by the Rockwell
Group pursuant to the Employee Matters Agreement, all Liabilities in respect of
employee welfare and fringe benefits relating to the Semiconductor Business
(including, without limitation, claims for medical and disability benefits), (G)
all Liabilities for environmental matters based upon, arising out of, relating
to or otherwise in connection with the Semiconductor Business, including,
without limitation, Liabilities in respect of any facility to the extent
relating to the Semiconductor Business presently or formerly owned or operated
by any member of the Pre-Distribution Group, (H) all Liabilities based upon,
arising out of, relating to or otherwise in connection with Contracts related to
the Semiconductor Business, including, without limitation, Liabilities to make
payments or otherwise in connection with the termination thereof as a result of
the transactions contemplated hereby or otherwise, (I) all Liabilities in
respect of commitments of charitable trusts relating to the Semiconductor
Business (except for an aggregate of $[ ] of such commitments existing at the
Time of Distribution, which shall be funded by such trusts), (J) all Liabilities
payable under the BNA Transition Agreement and all agreements executed in
connection therewith related to the Semiconductor Business, including, without
limitation, payment for all services performed for the Semiconductor Business
and (K) all Liabilities relating to the Japanese Credit Facilities and all other
credit facilities to which any member of the Company Group is a party at the
Time of Distribution, including, without limitation, all indebtedness
outstanding thereunder and interest and fees payable with respect thereto.
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"Shared Agreements" means all credit facilities, guaranties, foreign
currency forward exchange contracts, comfort letters, letters of credit and
similar instruments, bonds, indemnities, assurances and Contracts under which
Rockwell or any Rockwell Subsidiary has any primary, secondary, contingent,
joint, several or other Liability arising out of or relating to both (i) the
Semiconductor Business and (ii) one or more other businesses of Rockwell or any
Rockwell Subsidiary, which by their terms will be outstanding or in effect as of
or at any time following the Time of Distribution, including, without
limitation, those set forth on Schedule 1.1(f).
"Subsidiary" means, with respect to any Person, any corporation or
other organization, whether incorporated or unincorporated, of which such Person
or any Subsidiaries of such Person controls or owns, directly or indirectly,
more than 50% of the stock or other equity interest, or more than 50% of the
voting power entitled to vote on the election of members to the board of
directors or similar governing body; provided, however, that for purposes of
this Agreement neither the Company nor any Company Subsidiary shall be deemed to
be a Rockwell Subsidiary (as defined herein).
"Tax" shall have the meaning ascribed thereto in the Tax Allocation
Agreement.
"Tax Allocation Agreement" means the Tax Allocation Agreement between
Rockwell and the Company, substantially in the form attached hereto as Annex B.
"Tax Ruling" means a private letter ruling issued by the IRS in form
and substance satisfactory to Rockwell (in its sole discretion) indicating that
the Distribution will qualify as a tax-free spin-off to the shareowners of
Rockwell for federal income tax purposes under Section 368(a)(1)(D) of the Code.
"Third Party Claim" shall have the meaning ascribed thereto in Section
4.05(a).
"Third Party Licensee" shall have the meaning ascribed thereto in
Section 3.11(c)(ii).
"Third Party Licensor" shall have the meaning ascribed thereto in
Section 3.11(c)(ii).
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"Time of Distribution" means the close of business on the Distribution
Date.
"Transaction Agreements" means, collectively, this Agreement and each
Ancillary Agreement.
"Transition Agreement" means a transition services agreement between
Rockwell and the Company which will be entered into on or prior to the
Distribution Date and will provide for various service and other relationships
between Rockwell and the Company following the Distribution Date.
"Transition Period" shall have the meaning ascribed thereto in Section
3.11(d)(i)(C).
"Western Atlas Litigation" means the litigation listed as Item A.11 on
Schedule 1.1(g) existing as of the Distribution Date (it being understood that
the parties to such dispute may raise additional issues in connection
therewith).
"Western Atlas Litigation Liabilities" means all Liabilities in respect
of the Western Atlas Litigation arising solely from sales by Rockwell's Avionics
& Communications business to commercial customers of products incorporating
chipsets purchased by Rockwell's Avionics & Communications business from
suppliers other than the Semiconductor Business.
ARTICLE II
THE DISTRIBUTION
Section 2.01 The Distribution. (a) Subject to Section 2.03, on or prior
to the Distribution Date, Rockwell will deliver to the Distribution Agent, for
the benefit of holders of record of Rockwell Common Stock as of the Record Date,
a certificate or certificates, endorsed by Rockwell in blank, representing, in
the aggregate (and rounded up to the nearest whole share), a number of shares of
Semiconductor Common Stock equal to the number of shares of Rockwell Common
Stock issued and outstanding as of the Record Date (excluding treasury shares
held by Rockwell) divided by [___], and Rockwell will instruct the Distribution
Agent to make book-entry
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credits on the Distribution Date or as soon thereafter as practicable for each
holder of record of Rockwell Common Stock as of the Record Date, or the
designated transferee or transferees of such holder, for a number of shares
(including fractional shares) of Semiconductor Common Stock equal to the
quotient obtained by dividing (i) the number of shares of Rockwell Common Stock
so held by such holder of record as of the Record Date divided by (ii) [___].
The Distribution will be effective as of the Time of Distribution.
(b) Rockwell and the Company will each provide to the
Distribution Agent all information (including, without limitation, information
necessary to make appropriate book-entry credits) and share certificates, in
each case, as may be required in order to complete the Distribution on the basis
of one share of Semiconductor Common Stock for every [___] shares of Rockwell
Common Stock issued and outstanding as of the Record Date (excluding treasury
shares held by Rockwell).
Section 2.02 Cooperation Prior to the Distribution. Prior to the
Distribution:
(a) Rockwell and the Company will prepare, and Rockwell will
mail, promptly after effectiveness of the Form 10, to the holders of Rockwell
Common Stock, the Information Statement, which will set forth appropriate
disclosure concerning the Company, the Distribution and such other matters as
Rockwell and the Company may determine. Rockwell and the Company will prepare,
and the Company will file with the Commission, the Form 10, which will include
or incorporate by reference the Information Statement. The Company will use its
reasonable best efforts to cause the Form 10 to become effective under the
Exchange Act as soon as practicable following the filing thereof.
(b) Rockwell and the Company will cooperate in preparing,
filing with the Commission and causing to become effective any registration
statements or amendments thereof which are required to reflect the establishment
of, or amendments to, any employee benefit and other plans contemplated by the
Employee Matters Agreement.
(c) Rockwell and the Company will take all such action as may
be necessary or appropriate under the
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securities or "blue sky" laws of the states or other political subdivisions of
the United States and the securities laws of any applicable foreign countries or
other political subdivisions thereof in connection with the transactions
contemplated by this Agreement.
(d) Rockwell and the Company will cause to be prepared, and
the Company will file and use its reasonable best efforts to have approved, an
application for approval of trading and quotation on Nasdaq of the Semiconductor
Common Stock to be distributed in the Distribution.
Section 2.03 Rockwell Board Action; Conditions to the Distribution. The
Rockwell Board will in its discretion establish the Record Date and the
Distribution Date and all appropriate procedures in connection with the
Distribution, but in no event will the Distribution occur prior to such time as
each of the following conditions shall have been satisfied or shall have been
waived by the Rockwell Board in accordance with Section 2.04:
(a) Rockwell shall have received the Tax Ruling and the Tax
Ruling shall be in full force and effect and shall not have been modified or
amended in any respect adversely affecting the tax consequences set forth
therein;
(b) the Rockwell Board shall have given final approval of the
Distribution;
(c) all material Consents which are required to effect the
Distribution shall have been obtained and shall be in full force and effect;
(d) the Form 10 shall have become effective under the Exchange
Act;
(e) the Certificate of Incorporation, the By-Laws and the
Rights Plan each shall have been adopted and be in effect;
(f) the Semiconductor Common Stock shall have been approved
for trading and quotation on Nasdaq;
(g) the transactions contemplated by Section 3.01 and Section
3.02 shall have been consummated in all material respects;
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(h) Rockwell and the Company shall have entered into each of
the Ancillary Agreements and each such agreement shall be in full force and
effect;
(i) the No-action Letter shall have been issued and shall be
in full force and effect;
(j) no order, injunction or decree issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing
consummation of the Distribution shall be in effect; and
(k) no suit, action or proceeding by or before any court of
competent jurisdiction or other Governmental Entity shall have been commenced
and be pending to restrain or challenge the Distribution, and no inquiry shall
have been received that in the reasonable judgment of the Rockwell Board may
lead to such a suit, action or proceeding;
provided that the satisfaction of such conditions will not create any obligation
on the part of Rockwell to effect or seek to effect the Distribution or in any
way limit Rockwell's right to terminate this Agreement set forth in Section 6.13
or alter the consequences of any such termination from those specified in such
Section.
Section 2.04 Waiver of Conditions. Any or all of the conditions set
forth in Section 2.03 may be waived, in whole or in part, in the sole discretion
of the Rockwell Board.
Section 2.05 Disclosure. If at any time after the date hereof either of
the parties shall become aware of any circumstances that will or may prevent any
or all of the conditions contained in Section 2.03 from being satisfied, it will
promptly give to the other party written notice of those circumstances.
ARTICLE III
TRANSACTIONS RELATING TO THE DISTRIBUTION
Section 3.01 Intercorporate Reorganization. (a) Prior to the
Distribution Date, Rockwell and the Company will take all actions necessary to
increase the outstanding shares of Semiconductor Common Stock so that,
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immediately prior to the Distribution, Rockwell will hold a number of shares of
Semiconductor Common Stock (rounded up to the nearest whole share) equal to the
number of shares of Rockwell Common Stock issued and outstanding as of the
Record Date (excluding treasury shares held by Rockwell) divided by [___].
(b) Subject to Section 3.10, prior to the Time of
Distribution, Rockwell and the Company will take, or cause to be taken, all
actions necessary, including, without limitation, the actions specified in
Section 3.01(c), to:
(i) have Rockwell and each Rockwell Subsidiary assign and
transfer, or cause to be assigned and transferred, to the Company or a
Company Subsidiary, as appropriate, any and all right, title and
interest of Rockwell and each of the Rockwell Subsidiaries in the
Company Subsidiaries;
(ii) have Rockwell and each Rockwell Subsidiary assign and
transfer, or cause to be assigned and transferred, to the Company or a
Company Subsidiary, as appropriate, any and all right, title and
interest of Rockwell and each of the Rockwell Subsidiaries in the
Semiconductor Assets;
(iii) have the Company and each Company Subsidiary assign and
transfer, or cause to be assigned and transferred, to a Rockwell
Subsidiary any and all right, title and interest of the Company and
each of the Company Subsidiaries in all Rockwell Assets (including,
without limitation, all Rockwell Retained Assets);
(iv) have Rockwell and each Rockwell Subsidiary assign and
transfer, or cause to be assigned and transferred, to the Company or a
Company Subsidiary, as appropriate, and have the Company or a Company
Subsidiary, as appropriate, unconditionally assume and undertake to
pay, perform and discharge, in a timely manner and in accordance with
the terms thereof, all Liabilities of Rockwell and the Rockwell
Subsidiaries that are Semiconductor Liabilities; and
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(v) have the Company and each Company Subsidiary assign and
transfer, or cause to be assigned and transferred, to Rockwell or a
Rockwell Subsidiary, as appropriate, and have Rockwell or a Rockwell
Subsidiary, as appropriate, unconditionally assume and undertake to
pay, perform and discharge, in a timely manner and in accordance with
the terms thereof, all of the Assumed Rockwell Liabilities.
In the event that at any time or from time to time (whether
prior to or after the Time of Distribution) either party (or any member of such
party's respective Group) shall receive or otherwise possess any Asset that is
allocated to any other Person pursuant to this Agreement or any Ancillary
Agreement, such party will promptly transfer, or cause to be transferred, such
Asset to the Person so entitled thereto. Prior to any such transfer, the Person
receiving or possessing such Asset will hold such Asset in trust for the benefit
of the Person entitled thereto (at the expense of the Person entitled thereto).
In the event that at any time or from time to time (whether prior to or after
the Time of Distribution) either Rockwell or the Company determines that the
other party (or any member of such other party's respective Group) shall not
have unconditionally assumed any Liabilities that are allocated to such other
Party (or a member of such other party's respective Group) pursuant to this
Agreement or any Ancillary Agreement, such other party will promptly execute and
deliver, or cause to be executed and delivered, all such documents and
instruments and will take, or cause to be taken, all such actions as the
requesting party may reasonably request to unconditionally assume, or cause to
be unconditionally assumed, such Liabilities.
(c) Subject to Section 3.10, Rockwell and the Company will
take, or cause to be taken, the actions described on Schedule 3.1(c) in
connection with United States and international operations of the Semiconductor
Business.
(d) In connection with the transfers of Subsidiaries and
Assets and the assumptions of Liabilities contemplated by subsections (b) and
(c) of this Section 3.01, Rockwell and the Company will execute or cause to be
executed by the appropriate entities the Conveyance and Assumption Instruments.
The transfer of capital stock contemplated by such subsections will be
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effected by means of delivery of stock certificates duly endorsed or accompanied
by duly executed stock powers and notation on the stock record books of the
corporation or other legal entities involved and, to the extent required by
applicable law, by notation on appropriate registries.
(e) Each of Rockwell (on behalf of itself and each member of
the Rockwell Group) and the Company (on behalf of itself and each member of the
Company Group) understands and agrees that, except as expressly set forth in any
Transaction Agreement, no party to any Transaction Agreement or any other
agreement or document contemplated by any Transaction Agreement either has or
is, in such agreement or otherwise, representing or warranting in any way as to
the Assets, Subsidiaries, businesses or Liabilities retained, transferred or
assumed as contemplated hereby or thereby, as to any consents or approvals
required in connection with the transactions contemplated by the Transaction
Agreements, as to the value or freedom from any Lien of, or any other matter
concerning, any Assets or Subsidiaries of such party, or as to the absence of
any defenses or rights of setoff or freedom from counterclaim with respect to
any claim or other Assets or Subsidiaries of any party, or as to the legal
sufficiency of any assignment, document or instrument delivered hereunder or
thereunder to convey title to any Asset or Subsidiary or thing of value upon the
execution, delivery or filing hereof or thereof. Except as may expressly be set
forth in any Transaction Agreement, all Assets and Subsidiaries being
transferred or retained as contemplated by any Transaction Agreement or any
other agreement or document contemplated by any Transaction Agreement are being
transferred, or are being retained, on an "as is", "where is" basis (and, in the
case of the transfer of any real property, by means of a quitclaim or similar
form deed or conveyance) and the respective transferees shall bear the economic
and legal risks that any conveyance shall prove to be insufficient or that the
title to any Asset or Subsidiary shall be other than good and marketable and
free and clear of any Lien.
(f) It is the intention of the parties that payments made by
the parties to each other after the Time of Distribution pursuant to the
Transaction Agreements are to be treated as relating back to the transactions
occurring prior to the Time of Distribution pursuant to this Section 3.01 as an
adjustment to the transfers of
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Assets, Subsidiaries and Liabilities contemplated by this Section 3.01, and
Rockwell and the Company will, and will cause their Subsidiaries to, take
positions consistent with such intention with any Tax authority, unless with
respect to any payment any party receives an opinion of counsel reasonably
acceptable to the other party to the effect that there is no substantial
authority for such a position.
Section 3.02 Rockwell Group Obligations Relating to the Semiconductor
Business. (a) The Company will, at its expense, take or cause to be taken all
actions and enter into (or cause its Subsidiaries to enter into) such agreements
and arrangements as shall be necessary to effect the release of and substitution
for each member of the Rockwell Group, effective as of the Time of Distribution,
from all primary, secondary, contingent, joint, several and other Liabilities in
respect of Semiconductor Financial Instruments (it being understood that all
Liabilities in respect of Semiconductor Financial Instruments are Semiconductor
Liabilities).
(b) The Company will, at its expense, use its reasonable best
efforts to take or cause to be taken all actions and to enter into (or cause its
Subsidiaries to enter into) such agreements and arrangements as shall be
necessary to effect the release of and substitution for each member of the
Rockwell Group, effective as of the Time of Distribution, from all primary,
secondary, contingent, joint, several and other Liabilities in respect of bonds,
indemnities, assurances and Contracts (other than Semiconductor Financial
Instruments, which are covered by paragraph (a) above, and Shared Agreements,
which are covered by paragraph (c) below) under which any member of the Rockwell
Group has any primary, secondary, contingent, joint, several or other Liability
arising out of or relating to the Semiconductor Business which by their terms
will be outstanding or in effect as of or at any time following the Time of
Distribution; provided, however, that the Company shall not be obligated to pay
any consideration therefor to any third party (it being understood that all
Liabilities in respect of such bonds, indemnities, assurances and Contracts are
Semiconductor Liabilities).
(c) The Company will, at its expense, use its reasonable best
efforts to take or cause to be taken all
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actions and to enter into (or cause its Subsidiaries to enter into) such
agreements and arrangements as shall be necessary to effect the release of and
substitution for each member of the Rockwell Group, effective as of the Time of
Distribution, from all primary, secondary, contingent, joint, several or other
Liabilities arising out of or relating to the Semiconductor Business under
Shared Agreements; provided, however, that the Company shall not be obligated to
pay any consideration therefor to any third party (it being understood that all
Liabilities in respect of Shared Agreements arising out of or relating to the
Semiconductor Business are Semiconductor Liabilities). No member of the Company
Group will incur, without the prior written consent of Rockwell, any Liabilities
under any Shared Agreement or extend or otherwise amend any Shared Agreement
after the Time of Distribution.
(d) The Company's obligations under this Section 3.02 will
continue to be applicable to all Semiconductor Financial Instruments, bonds,
indemnities, assurances, Contracts and Shared Agreements identified at any time
by Rockwell, whether before, at or after the Time of Distribution.
Section 3.03 Intercompany Accounts and Arrangements.
(a) Elimination of Intercompany Accounts.
(i) Except as set forth in Section 3.03(a)(ii) or on
Schedule 3.3(a), the Company, on behalf of itself and each other member
of the Company Group, on the one hand, and Rockwell, on behalf of
itself and each other member of the Rockwell Group, on the other hand,
hereby settle and eliminate, by cancellation or transfer to a member of
the other Group (whether to cancel or transfer and the manner thereof
will be determined by Rockwell), effective as of the Time of
Distribution, all intercompany receivables, payables and other balances
(including, without limitation, intercompany cash management balances)
between the Company and/or any Company Subsidiary, on the one hand, and
Rockwell and/or any Rockwell Subsidiary, on the other hand.
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(ii) The provisions of Section 3.03(a)(i) will not apply to
any intercompany receivables, payables and other balances (A) incurred
in connection with or in contemplation of the transactions described on
Schedule 3.1(c) or (B) incurred in connection with the payment by any
party of any expenses which are required to be paid by the other party
pursuant to Section 6.03.
(b) Intercompany Agreements.
(i) Except as set forth in Section 3.03(b)(ii), in furtherance
of the releases and other provisions of Section 4.01, the Company, on
behalf of itself and each other member of the Company Group, on the one
hand, and Rockwell, on behalf of itself and each other member of the
Rockwell Group, on the other hand, hereby terminate any and all
agreements, arrangements, commitments or understandings in existence as
of the Time of Distribution, whether or not in writing, between or
among the Company and/or any Company Subsidiary, on the one hand, and
Rockwell and/or any Rockwell Subsidiary, on the other hand, effective
as of the Time of Distribution. No such terminated agreement,
arrangement, commitment or understanding (including, without
limitation, any provision thereof which purports to survive
termination) shall be of any further force or effect after the Time of
Distribution.
(ii) The provisions of Section 3.03(b)(i) will not apply to
any of the following agreements, arrangements, commitments or
understandings (or to any of the provisions thereof): (A) the
Transaction Agreements (and each other agreement, instrument or
document expressly contemplated by any Transaction Agreement to be
entered into by any of the parties hereto or any of the members of
their respective Groups); (B) any agreement, arrangement, commitment or
understanding relating to any matter described in Section 3.03(a)(ii);
(C) any agreements, arrangements, commitments or understandings listed
or described on Schedule 3.3(b)(ii); (D) any agreements, arrangements,
commitments or understandings to which any Person other than the
parties hereto and their respective Affiliates is a party; (E) any
other agreements, arrangements,
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commitments or understandings that any of the Transaction Agreements
expressly contemplates will survive the Time of Distribution; and (F)
any agreements, arrangements, commitments or understandings between the
Company and/or any Company Subsidiary, on the one hand, and Rockwell
and/or any Rockwell Subsidiary, on the other hand, for the purchase or
sale of goods or services of a type which the provider thereof provides
to unaffiliated third parties in the ordinary course of business
("Ordinary Course Intercompany Arrangements"); provided, however, that
in the event any such Ordinary Course Intercompany Arrangements do not,
as of the Time of Distribution, contain commercially reasonable
arm's-length terms of a type to which unaffiliated parties would
reasonably agree or do not include terms which would normally appear in
such arrangements between unaffiliated parties, Rockwell and the
Company will cause such Ordinary Course Intercompany Arrangements to be
amended so that they will contain terms which are, as of the Time of
Distribution, commercially reasonable arm's-length terms of a type to
which unaffiliated parties would reasonably agree.
Section 3.04 Cash Management. (a) Bank Accounts. Subject to Section
3.04(b), all Semiconductor Bank Accounts will constitute Semiconductor Assets
and all Rockwell Retained Accounts will constitute Rockwell Assets.
(b) Cash Balances. (i) In the event that the Recorded Amount
of Cash in the Semiconductor Bank Accounts (A) exceeds the Japanese Debt Amount,
the Company will pay to Rockwell (by wire transfer to Rockwell's bank account at
Mellon Bank, N.A., Pittsburgh, Pennsylvania, Account No. 102-3474), within ten
business days after the Distribution Date, an amount equal to such excess or (B)
is less than the Japanese Debt Amount, Rockwell will pay to the Company (by wire
transfer to the Company's bank account at [ ], Account No. [ ]), within ten
business days after the Distribution Date, an amount equal to such deficit.
(ii) The Company will pay to Rockwell (by wire transfer to
Rockwell's bank account at Mellon Bank, N.A., Pittsburgh, Pennsylvania,
Account No. 102-3474), within three business days after the
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Distribution Date, (A) all balances contained as of the Time of
Distribution in xxxxx cash accounts at locations of the Semiconductor
Business and (B) the dollar value of travelers checks as of the Time of
Distribution at locations of the Semiconductor Business.
(c) Rockwell Customer Payments. The Company will, and will
cause its Subsidiaries and Affiliates to, forward promptly to Rockwell (for the
account of Rockwell or its applicable Subsidiary) any customer payments in
respect of accounts receivable owed to any member of the Rockwell Group received
by the Company or any of its Subsidiaries or Affiliates after the Time of
Distribution, whether received in lock boxes, via wire transfer or otherwise.
Such amounts will be forwarded by wire transfer (to Rockwell's bank account at
Mellon Bank, N.A., Pittsburgh, Pennsylvania, Account No. 102-3474) in the case
of customer payments received within thirty days after the Distribution Date and
by check in the case of customer payments received thereafter.
(d) Company Customer Payments. Rockwell will, and will cause
its Subsidiaries and Affiliates to, forward promptly to the Company (for the
account of the Company or its applicable Subsidiary) any customer payments in
respect of accounts receivable owed to any member of the Company Group received
by Rockwell or any of its Subsidiaries or Affiliates after the Time of
Distribution, whether received in lock boxes, via wire transfer or otherwise.
Such amounts will be forwarded by wire transfer in the case of customer payments
received within thirty days after the Distribution Date and by check in the case
of customer payments received thereafter.
(e) Funding of Outstanding Checks. (i) The following
subsections of this Section 3.04(e) are intended to implement the parties'
agreement that the Company or a Company Subsidiary will be liable for payment of
checks relating to the Semiconductor Business that are outstanding as of the
Time of Distribution.
(ii) The Company or a Company Subsidiary will fund all amounts
in respect of checks that are outstanding as of the Time of
Distribution and presented for payment after the Time of Distribution
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in disbursement or payroll accounts that are Semiconductor Bank
Accounts.
(iii) Rockwell or a Rockwell Subsidiary will fund all amounts
in respect of checks that are outstanding as of the Time of
Distribution and presented for payment after the Time of Distribution
in disbursement or payroll accounts that are Rockwell Retained
Accounts. Within three business days after Rockwell's request, the
Company will reimburse Rockwell (by wire transfer to Rockwell's bank
account at Mellon Bank, N.A., Pittsburgh, Pennsylvania, account number
102-3474), for the account of Rockwell or the applicable Rockwell
Subsidiary, for all such amounts funded by Rockwell or a Rockwell
Subsidiary in respect of checks relating to the Semiconductor Business
that are outstanding as of the Time of Distribution and presented for
payment after the Time of Distribution in disbursement or payroll
accounts that are Rockwell Retained Accounts. No checks relating to the
Semiconductor Business will be issued on any Rockwell Retained Accounts
after the Time of Distribution [(other than checks relating to payroll
payments to the extent expressly permitted by the Transition
Agreement)].
Section 3.05 The Semiconductor Board. The Company and Rockwell
will take all actions which may be required to elect or otherwise appoint as
directors of the Company, prior to the Time of Distribution, the persons named
in the Form 10 to constitute the board of directors of the Company at the Time
of Distribution.
Section 3.06 Resignations; Transfer of Stock Held as Nominee.
(a) Rockwell will cause all of its employees and directors and all of the
employees and directors of each other member of the Rockwell Group to resign,
not later than the Time of Distribution, from all boards of directors or similar
governing bodies of the Company or any other member of the Company Group on
which they serve, and from all positions as officers of the Company or any other
member of the Company Group in which they serve, except as otherwise specified
on Schedule 3.6. The Company will cause all of its employees and directors and
all of the employees and directors of each other member of the Company Group to
resign, not later than the Time of Distribution, from all boards of
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37
directors or similar governing bodies of Rockwell or any other member of the
Rockwell Group on which they serve, and from all positions as officers of
Rockwell or any other member of the Rockwell Group in which they serve, except
as otherwise specified on Schedule 3.6.
(b) Rockwell will cause each of its employees, and each of the
employees of the other members of the Rockwell Group, who holds stock, or
similar evidence of ownership, of any Company Group entity as nominee for such
entity pursuant to the laws of the country in which such entity is located to
transfer such stock, or similar evidence of ownership, to the Person so
designated by the Company to be such nominee as of and after the Time of
Distribution. The Company will cause each of its employees, and each of the
employees of the other members of the Company Group, who holds stock, or similar
evidence of ownership, of any Rockwell Group entity as nominee for such entity
pursuant to the laws of the country in which such entity is located to transfer
such stock, or similar evidence of ownership, to the Person so designated by
Rockwell to be such nominee as of and after the Time of Distribution.
(c) Rockwell will cause each of its employees and each of the
employees of the other members of the Rockwell Group to revoke or withdraw their
express written authority, if any, to act on behalf of any Company Group entity
as an agent or representative therefor after the Time of Distribution. The
Company will cause each of its employees and each of the employees of the other
members of the Company Group to revoke or withdraw their express written
authority, if any, to act on behalf of any Rockwell Group entity as an agent or
representative therefor after the Time of Distribution.
Section 3.07 Company Certificate of Incorporation and By-Laws; Rights
Plan. Prior to the Time of Distribution, (a) the Semiconductor Board will (i)
approve the Certificate of Incorporation and will cause the same to be filed
with the Secretary of State of the State of Delaware and (ii) adopt the By-Laws,
and (b) Rockwell, as sole stockholder of the Company, will approve the
Certificate of Incorporation. Prior to the Time of Distribution, the
Semiconductor Board will adopt the Rights Plan and declare a dividend of the
Rights so that each share of Semiconductor Common Stock issued and
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outstanding as of the Time of Distribution will initially have one Right
attached thereto.
Section 3.08 Insurance. (a) Coverage. Coverage of the Company and the
Company Subsidiaries under all Policies shall cease as of the Time of
Distribution. From and after the Time of Distribution, the Company and the
Company Subsidiaries will be responsible for obtaining and maintaining all
insurance coverages in their own right. All Policies will constitute Rockwell
Retained Assets and will be retained by Rockwell and the Rockwell Subsidiaries
(with Rockwell and the Rockwell Subsidiaries being the only named insureds
thereunder), together with all rights, benefits and privileges thereunder
(including, without limitation, the right to receive any and all return premiums
with respect thereto). The Company and the Company Subsidiaries will have no
rights with respect to any Policies, except that (i) the Company will have the
right to assert claims (and Rockwell will use reasonable best efforts to assist
the Company in asserting claims) for any loss, liability or damage with respect
to Semiconductor Assets under Policies with third-party insurers which are
"occurrence basis" Policies ("Occurrence Basis Policies") arising out of insured
incidents occurring from the date coverage thereunder first commenced until the
Time of Distribution to the extent that the terms and conditions of any such
Occurrence Basis Policies and agreements relating thereto so allow and (ii) the
Company will have the right to continue to prosecute claims properly asserted
with the insurance carrier prior to the Time of Distribution (and Rockwell will
use reasonable best efforts to assist the Company in connection therewith) under
Policies with third-party insurers which are Policies written on a "claims made"
basis ("Claims Made Policies") arising out of insured incidents occurring from
the date coverage thereunder first commenced until the Time of Distribution to
the extent that the terms and conditions of any such Claims Made Policies and
agreements relating thereto so allow, provided that, in the case of both clauses
(i) and (ii) above, (A) all of Rockwell's and each Rockwell Subsidiary's
reasonable costs and expenses incurred in connection with the foregoing are
promptly paid by the Company, (B) Rockwell and the Rockwell Subsidiaries may, at
any time, without liability or obligation to the Company or any Company
Subsidiary (other than as set forth in Section 3.08(b)), amend, commute,
terminate,
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buy-out, extinguish liability under or otherwise modify any Occurrence Basis
Policies or Claims Made Policies (and such claims shall be subject to any such
amendments, commutations, terminations, buy-outs, extinguishments and
modifications), (C) such claims will be subject to (and recovery thereon will be
reduced by the amount of) any applicable deductibles, retentions, self-insurance
provisions or any payment or reimbursement obligations of Rockwell, any Rockwell
Subsidiary or any Affiliate of Rockwell or any Rockwell Subsidiary in respect
thereof and (D) such claims will be subject to exhaustion of aggregate limits.
Rockwell's obligation to use reasonable best efforts to assist the Company in
asserting claims under Occurrence Basis Policies will include using reasonable
best efforts in assisting the Company to establish its right to coverage under
Occurrence Basis Policies (so long as all of Rockwell's costs and expenses in
connection therewith are promptly paid by the Company). None of Rockwell or the
Rockwell Subsidiaries will bear any Liability for the failure of an insurance
carrier to pay any claim under any Occurrence Basis Policy or Claims Made
Policy. It is understood that any Claims Made Policies will not provide any
coverage to the Company and the Company Subsidiaries for incidents occurring
prior to the Time of Distribution but which are asserted with the insurance
carrier after the Time of Distribution[, except and to the extent that coverage
is provided under discovery coverage purchased by the Company (at the Company's
expense) with respect to Rockwell's excess general liability Claims Made
Policies].
(b) Rockwell Actions. In the event that Rockwell or any
Rockwell Subsidiary proposes to amend, commute, terminate, buy-out, extinguish
liability under or otherwise modify any Occurrence Basis Policies or Claims Made
Policies under which the Company has rights to assert claims pursuant to Section
3.08(a) in a manner that would adversely affect any such rights of the Company,
(i) Rockwell will give the Company prior notice thereof and consult with the
Company with respect to such action (it being understood that the decision to
take any such action will be in the sole discretion of Rockwell) and (ii)
Rockwell will pay to the Company its equitable share (based on the amount of
premiums paid by or allocated to the Semiconductor Business in respect of the
applicable Policy) of any net proceeds actually received by Rockwell from the
insurance carrier of the applicable
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Policy as a result of such action by Rockwell (after deducting Rockwell's
reasonable costs and expenses incurred in connection with such action).
(c) Administration. From and after the Time of Distribution:
(i) Rockwell will be responsible for the Claims
Administration with respect to claims of Rockwell and the
Rockwell Subsidiaries under Occurrence Basis Policies and
Claims Made Policies; and
(ii) The Company or a Company Subsidiary, as
appropriate, will be responsible for the Claims Administration
with respect to the claims of the Company and the Company
Subsidiaries under Occurrence Basis Policies and Claims Made
Policies.
(d) Insurance Premiums. Rockwell will pay all premiums
(retrospectively-rated or otherwise) as required under the terms and conditions
of the respective Policies in respect of periods prior to the Time of
Distribution, whereupon the Company will upon receipt of evidence thereof,
forthwith reimburse Rockwell for that portion of such premiums paid by Rockwell
as are attributable to the Semiconductor Business.
(e) Agreement for Waiver of Conflict and Shared Defense. In
the event that an Occurrence Basis Policy or Claims Made Policy provides
coverage for both Rockwell and/or a Rockwell Subsidiary, on the one hand, and
the Company and/or a Company Subsidiary, on the other hand, relating to the same
occurrence, Rockwell and the Company agree to defend jointly and to waive any
conflict of interest necessary to the conduct of that joint defense. Nothing in
this Section 3.08(e) will be construed to limit or otherwise alter in any way
the indemnity obligations of the parties to this Agreement, including, without
limitation, those created by this Agreement, by operation of law or otherwise.
(f) Directors' and Officers' Insurance. Rockwell will use its
reasonable best efforts to cause the persons currently serving as directors
and/or officers of Rockwell or any Subsidiary of Rockwell who will become
effective as of the Time of Distribution directors and/or officers of the
Company or any Company
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Subsidiary to be covered for a period of six years from the Time of Distribution
with respect to claims arising from facts or events which occurred prior to the
Time of Distribution by the directors' and officers' liability insurance
policies maintained by Rockwell during such six-year period following the Time
of Distribution for all persons who served as directors and/or officers of
Rockwell or any Rockwell Subsidiary prior to the Time of Distribution with
respect to claims arising from facts or events which occurred prior to the Time
of Distribution.
Section 3.09 Use of Names, Trademarks, etc. (a) From and after the Time
of Distribution, Rockwell will have all rights in and use of the names
"Rockwell" and "Rockwell International" and all corporate symbols and logos
related thereto and all derivatives thereof. Prior to or promptly after the Time
of Distribution (but in no event later than 90 days after the Distribution Date
in the case of United States Persons and 180 days after the Distribution Date in
the case of non-United States Persons), the Company will change the name of any
Subsidiary or other Person under its control to eliminate therefrom the names
"Rockwell" and "Rockwell International" and all derivatives thereof.
(b) From and after the Time of Distribution, except as
permitted in this Section 3.09(b), the Company Group will not use or have any
rights to the names "Rockwell" or "Rockwell International" or any derivatives
thereof or any other trademark, trade name, service xxxx or logo of the Rockwell
Group constituting Rockwell Assets, including, without limitation, the
trademarks, trade names and service marks "Rockwell" and "Rockwell
International", or any corporate symbol or logo related thereto or to any
thereof or any name or xxxx which includes the words "Rockwell" or "Rockwell
International" or any derivative thereof or name or xxxx confusingly similar
thereto, or any special script, type font, form, style, logo, design, device,
trade dress or symbol used or possessed by the Rockwell Group before or after
the Time of Distribution which contains the trademark, trade name or service
xxxx "Xxxxxxxx" or "Xxxxxxxx International" or any derivative thereof or any
name or xxxx confusingly similar thereto and the Company Group will not hold
itself out as having any affiliation with the Rockwell Group. However, Rockwell,
on behalf of Rockwell Science Center, hereby grants to the Company a
non-exclusive, non-transferable (other than by way of
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42
sublicenses to members of the Company Group) license to utilize without
obligation to pay royalties to Rockwell or Rockwell Science Center the
trademarks or trade names "Rockwell" or "Rockwell International" or any
corporate symbol or logo related thereto in connection with stationery,
supplies, labels, catalogs, vehicles, signs and products of the Semiconductor
Business only as set forth in paragraphs (i) through (vi) of this Section
3.09(b), subject to the terms and conditions of this Section 3.09(b) and Section
3.09(c), in each case in the same manner and to the same extent as such
trademarks, trade names, corporate symbols or logos were used by the
Semiconductor Business at any time within the five-year period preceding the
Distribution:
(i) All documents constituting Semiconductor Assets
as of the Time of Distribution within the following categories
may be used for the duration of the periods following the
Distribution Date indicated below or until the supply is
exhausted, whichever is the first to occur:
Maximum Period
of Permitted Use
Following the
Category of Documents Distribution Date
--------------------- -----------------
A. Stationery 6 months
B. Invoices, purchase orders, debit
and credit memos and other similar
documents of a transactional nature 6 months
C. Business cards 6 months
D. Other outside forms such as packing
lists, labels, packing materials and
cartons, etc. 12 months
E. Forms for internal use only 12 months
F. Product literature 12 months;
provided, however, that the Company will use its reasonable
best efforts to cause each document within any of the above
categories A, B or F used for any purpose within the stated
period to clearly and prominently display a statement, the
form of which is approved by Rockwell, to the effect that the
Company Group was formerly affiliated with
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Rockwell (it being understood that such reasonable best
efforts shall not include reprinting or relabeling existing
stocks of advertising or brochures).
[(ii) All documents of the Semiconductor Business of
the type described in paragraph (i) above and displays and
signs of the Semiconductor Business of the type described in
paragraph (iv) below may, for a period of [__ years] after the
Distribution Date, contain the statement "_________" in
conjunction with the name of the Company or any Company
Subsidiary so long as such statement is of a type no more
prominent than such name of the Company or the Company
Subsidiary or other statement, the form of which is approved
by Rockwell, to the effect that the Company Group was formerly
affiliated with Rockwell.]
(iii) All vehicles constituting Semiconductor Assets
as of the Time of Distribution may continue to be used without
re-marking (except as to legally required permit numbers,
license numbers, etc.) for a period not to exceed twelve
months following the Distribution Date or the date of
disposition of the vehicle, whichever is the first to occur.
The Company will cause all markings on such vehicles to be
removed or permanently obscured prior to disposition of such
vehicles.
(iv) Within six months following the Distribution
Date, the Company will cause to be removed from display at all
facilities constituting Semiconductor Assets all demountable
displays which contain the trademarks or trade names
"Rockwell" or "Rockwell International" or any corporate symbol
related thereto or any trademark, trade name or corporate
symbol constituting Rockwell Assets and the Company will
remove, or will cause the removal of, all signs displaying any
such trademark, trade name or corporate symbol at all such
facilities (A) located in the United States, no later than six
months following the Distribution Date and (B) located outside
the United States, no later than twelve months following the
Distribution Date.
(v) Products of the Semiconductor Business may have
applied thereto the trademarks or trade
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names "Rockwell" or "Rockwell International" or any Rockwell
corporate symbol or logo related thereto for a period of [ ]
years after the Distribution.
(vi) Products of the Semiconductor Business in
finished goods inventory and work in process (to the extent
the same bear the trademark or trade name "Rockwell" or
"Rockwell International" at the Time of Distribution or have
any such trademark or trade name applied to them in accordance
with paragraph (v) above) may be disposed of without
re-marking.
(c)(i) Apart from the rights granted under Section 3.09(b), no
member of the Company Group shall acquire any right, title or interest
in or to the use of the trademarks or trade names "Rockwell" or
"Rockwell International" or any corporate symbol or logo related
thereto, either alone or in combination with any other word, name,
symbol, device, trademarks, or any combination thereof. Anything
contained herein to the contrary notwithstanding, except as expressly
permitted by Section 3.09(b)(ii), in no event will any member of the
Company Group utilize the trademarks or trade names "Rockwell" or
"Rockwell International" or any corporate symbol or logo related
thereto as a component of a company or trade name. The Company will
not, and will cause each other member of the Company Group not to,
challenge or contest the validity of such trademarks, trade names,
corporate symbols or logos, the registration thereof or the ownership
thereof by the Rockwell Group. The Company will not, and will cause
each other member of the Company Group not to, apply anywhere at any
time for any registration as owner or exclusive licensee of such
trademarks, trade names, corporate symbols or logos. If,
notwithstanding the foregoing, any member of the Company Group
develops, adopts or acquires, directly or indirectly, any right, title
or interest in or to the use of any such trademarks, trade names,
corporate symbols or logos in any jurisdiction, or any goodwill
incident thereto, the Company will, upon the request of Rockwell, and
for a nominal consideration of one dollar, assign or cause to be
assigned to Rockwell or any designee of Rockwell, all right, title and
interest in and to the use of such trademarks, trade names, corporate
symbols or logos in any and all
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jurisdictions, together with any goodwill incident thereto.
(ii) If the laws of any country require that any xxxx
subject to Section 3.09(b) or the right of any member of the Company
Group to use any xxxx as permitted by Section 3.09(b) be registered in
order to fully protect the Rockwell Group, Rockwell and the Company
will cooperate in constituting such member of the Company Group as a
registered user (or its equivalent) in each of the countries in which
such registration is necessary. If any such laws of any country require
that any such xxxx or the use by any member of the Company Group of any
such xxxx be registered prior to use in order to protect fully the
Rockwell Group, the license granted pursuant to Section 3.09(b) will
not extend to such country until such registration has been effected to
the reasonable satisfaction of Rockwell. Any expenses for registering
such xxxx or constituting such member of the Company Group as a
registered user in any country shall be borne by the Company. Any
registration of such member of the Company Group as a registered user
of any xxxx hereunder shall be expunged on termination of the period of
permitted use under this Agreement or upon a breach or threatened
breach by any member of the Company Group of the terms of this Section
3.09 and the Company will, upon request of Rockwell, take all necessary
steps to cause such registration to be so expunged upon such
termination or breach or threatened breach. In addition, the Company
hereby constitutes and appoints Rockwell the true and lawful attorney
of the Company, with full power of substitution, in the name and on
behalf of the Company (and at the cost of the Company) to take all
necessary steps to cause such registration to be so expunged upon such
termination or breach or threatened breach.
(iii) The Company will cause each member of the
Company Group to comply with the provisions of this Section 3.09.
Nothing in this Section 3.09 will prevent any member of the Rockwell
Group from enforcing the provisions of this Section 3.09 against any
member of the Company Group.
(iv) Rockwell will have the right to terminate the
license granted in Section 3.09(b)
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upon 30 days written notice for any failure by any member of the
Company Group to observe the terms of this Section 3.09(c), provided
that such failure is not remedied prior to the effectiveness of the
termination.
(d) From and after the Distribution Date, the Rockwell Group
will not hold itself out as having an affiliation with the Company Group.
However, the Rockwell Group will have rights to use trademarks or trade names or
corporate symbols or any thereof constituting Semiconductor Assets in connection
with stationery, supplies, labels, catalogs, vehicles, signs and finished goods
inventory on the same terms and subject to the same conditions as are set forth
in Section 3.09(b).
Section 3.10 Consents. Prior to and after the Distribution Date,
Rockwell and the Company will, and will cause their respective Subsidiaries to,
use their reasonable best efforts (as requested by the other party) to obtain,
or to cause to be obtained, all Consents and to resolve all impracticalities of
assignments or transfers necessary for the transfer of all Assets, Subsidiaries
and Liabilities contemplated to be transferred pursuant to this Article III;
provided, however, that none of Rockwell or the Company or their respective
Subsidiaries shall be obligated to pay any consideration or offer or grant any
financial accommodation in connection therewith. Anything contained herein to
the contrary notwithstanding, this Agreement shall not constitute an agreement
to assign any Contract, License or Asset if an assignment or attempted
assignment of the same without the Consent of any other party or parties thereto
or other required Consent would constitute a breach thereof or of any applicable
law or in any way impair the rights of any member of the Rockwell Group or the
Company Group thereunder. If any such Consent is not obtained or if an attempted
assignment would be ineffective or would impair any member of either Group's
rights under any such Contract, License or Asset so that the contemplated
assignee hereunder (the "Recipient Party") would not receive all such rights,
then (x) the party contemplated hereunder to assign such Contract, License or
Asset (the "Assigning Party") will use reasonable best efforts (it being
understood that such efforts shall not include any requirement of the Assigning
Party to pay any
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47
consideration or offer or grant any financial accommodation) to provide or cause
to be provided to the Recipient Party, to the extent permitted by law, the
benefits of any such Contract, License or Asset and the Assigning Party will
promptly pay or cause to be paid to the Recipient Party when received all moneys
and properties received by the Assigning Party with respect to any such
Contract, License or Asset and (y) the Recipient Party will pay, perform and
discharge on behalf of the Assigning Party all of the Assigning Party's
Liabilities thereunder in a timely manner and in accordance with the terms
thereof. In addition, the Assigning Party will take such other actions (at the
Recipient Party's expense) as may reasonably be requested by the Recipient Party
in order to place the Recipient Party, insofar as reasonably possible, in the
same position as if such Contract, License or Asset had been transferred as
contemplated hereby and so all the benefits and burdens relating thereto,
including, without limitation, possession, use, risk of loss, potential for gain
and dominion, control and command, shall inure to the Recipient Party. If and
when such Consents are obtained, the transfer of the applicable Contract,
License or Asset shall be effected as promptly following the Time of
Distribution as shall be practicable in accordance with the terms of this
Agreement. To the extent that any transfers and assumptions contemplated by this
Article III shall not have been consummated on or prior to the Time of
Distribution, the parties shall cooperate to effect such transfers as promptly
following the Time of Distribution as shall be practicable, it nonetheless being
agreed and understood by the parties that neither party shall be liable in any
manner to the other party for any failure of any of the transfers contemplated
by this Article III to be consummated prior to the Time of Distribution.
Section 3.11 Cross-License of Intellectual Property. (a) Effective as
of the Time of Distribution, Rockwell, on behalf of itself and the Rockwell
Subsidiaries, hereby grants to the Company a royalty-free, world-wide,
irrevocable, non-exclusive license under all intellectual property rights
(including, without limitation, patents, patent applications, trade secrets,
copyrights or other similar industrial property rights, but excluding
trademarks, trade names, service marks, trade dress or any other form of trade
identity) which constitute Rockwell Assets and which are owned by
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48
the Rockwell Group or under which the Rockwell Group has a right to license
without the payment of royalties to a third party immediately after the Time of
Distribution and which are used in the conduct of the business of the Company
Group at the Time of Distribution to make, have made, use, import, sell or
otherwise dispose of products, or to practice any process in connection
therewith, in the business of the Company Group being conducted at the Time of
Distribution or any related extensions or expansions thereof; said non-exclusive
license being transferable only by sublicenses (to the extent permitted in any
restricted grant to Rockwell or a Rockwell Subsidiary, as a licensee) to members
of the Company Group and in connection with the sale of all or any part of the
Semiconductor Business to which such intellectual property rights relate. In
addition, effective as of the Time of Distribution, Rockwell, on behalf of
itself and the Rockwell Subsidiaries, hereby grants to the Company a
royalty-free, world-wide, irrevocable, non-exclusive license under all
intellectual property rights (including, without limitation, patents, patent
applications, trade secrets, copyrights or other similar industrial property
rights, but excluding trademarks, trade names, service marks, trade dress or any
other form of trade identity) associated with the items listed on Schedule
3.11(a) to make, have made, use, import, sell or otherwise dispose of products,
or to practice any process in connection therewith, in the business of the
Company Group being conducted at the Time of Distribution or any related
extensions or expansions thereof; said non-exclusive license being transferable
only by sublicenses (to the extent permitted in any restricted grant to Rockwell
or a Rockwell Subsidiary, as a licensee) to members of the Company Group and in
connection with the sale of all or any part of the Semiconductor Business to
which such intellectual property rights relate. To the extent that the Company
Group does not have copies of any information or materials relating to
intellectual property rights licensed under this Section 3.11(a), Rockwell will,
upon reasonable request, supply to the Company Group copies of any such
information or materials relating to such intellectual property rights. Except
as expressly provided in this Section 3.11, none of the intellectual property
rights of the Rockwell Group shall be licensed by the Company or any Company
Subsidiary to any third party.
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49
(b) Effective as of the Time of Distribution, the Company on
behalf of itself and the Company Subsidiaries, hereby grants to Rockwell Science
Center a royalty-free, world-wide, irrevocable, non-exclusive license under all
intellectual property rights (including, without limitation, patents, patent
applications, trade secrets, copyrights or other similar industrial property
rights, but excluding trademarks, trade names, service marks, trade dress or any
other form of trade identity) which constitute Semiconductor Assets and which
are owned by the Company Group or under which the Company Group has a right to
license without the payment of royalties to a third party immediately after the
Time of Distribution and which are used in the conduct of the businesses of the
Rockwell Group other than the Semiconductor Business at the Time of Distribution
to make, have made, use, import, sell or otherwise dispose of products, or to
practice any process in connection therewith, in the businesses of the Rockwell
Group (other than the Semiconductor Business) being conducted at the Time of
Distribution or any related extensions or expansions thereof; said non-exclusive
license being transferable only by sublicenses (to the extent permitted in any
restricted grant to the Company or a Company Subsidiary, as a licensee) to
members of the Rockwell Group and in connection with the sale of all or any part
of the Rockwell Group's businesses to which such intellectual property rights
relate. In addition, effective as of the Time of Distribution, the Company, on
behalf of itself and the Company Subsidiaries, hereby grants to Rockwell Science
Center a royalty-free, world-wide, irrevocable, non-exclusive license under all
intellectual property rights (including, without limitation, patents, patent
applications, trade secrets, copyrights or other similar industrial property
rights, but excluding trademarks, trade names, service marks, trade dress or any
other form of trade identity) associated with the items listed on Schedule
3.11(b) to make, have made, use, import, sell or otherwise dispose of products,
or to practice any process in connection therewith, in the businesses of the
Rockwell Group (other than the Semiconductor Business) being conducted at the
Time of Distribution or any related extensions or expansions thereof; said
non-exclusive license being transferable only by sublicenses (to the extent
permitted in any restricted grant to the Company or a Company Subsidiary, as a
licensee) to members of the Rockwell Group and in connection with the
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50
sale of all or any part of the Rockwell Group's businesses to which such
intellectual property rights relate. To the extent that the Rockwell Group does
not have copies of any information or materials relating to intellectual
property rights licensed under this Section 3.11(b), the Company will, upon
reasonable request, supply to the Rockwell Group copies of any such information
or materials relating to such intellectual property rights. Except as expressly
provided in this Section 3.11, none of the intellectual property rights of the
Company Group shall be licensed by Rockwell or any Rockwell Subsidiary to any
third party.
(c)(i) From and after the Time of Distribution, each party
(and members of such party's Group) has and retains the unrestricted
right to enforce against any third party such intellectual property
rights as that party then owns. Notwithstanding the grant of any
license or sublicense to the other party (or the members of such other
party's Group) under Section 3.11(a) or (b), the owner of such
intellectual property rights may enforce the same without any
obligation (prior or contemporaneous) to notify or consult with the
other party.
(ii) Either party (as a "Third Party Licensor") may grant a
third party (a "Third Party Licensee") a license under patents owned by
the other party (the "Owner") at the Time of Distribution, whether or
not the Third Party Licensor is itself licensed under such patent(s) in
accordance with the provisions of Section 3.11(a) or (b), in fields of
use other than the businesses of the Owner, subject to strict
compliance with the provisions of this Section 3.11(c)(ii), each of
which is material
(A) the Third Party Licensor shall first confer with
the Owner and tender the proposed terms and conditions of the license
to the Third Party Licensee;
(B) the Owner may reject or condition the proposed
terms and conditions of the license for any of the following reasons:
(1) the Third Party Licensee is a competitor
of the Owner in markets or market sectors in which both
compete for the business
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of common customers or the output of common suppliers and the
grant of a license to such a Third Party Licensee would reduce
the competitiveness of the Owner in such common markets (or
sectors) or otherwise demonstrably harm its business
interests;
(2) the Owner is currently engaged in or has
taken substantial steps to prepare to become engaged in
negotiations with the Third Party Licensee regarding the grant
of intellectual property licenses or cross-licenses between
them, whether or not including the patent(s) sought to be
licensed by the Third Party Licensor;
(3) the Owner has, within the immediately
preceding twelve months, negotiated with the Third Party
Licensee a license or cross-license of the patent(s) sought to
be licensed to that Third Party Licensee by the Third Party
Licensor;
(4) the proposed terms and conditions would
impose obligations on the Owner other than or in addition to a
naked patent grant including, without limitation, the
obligations to enforce the patent(s) or to transfer
technology;
(5) the grant is broader than reasonably
required to meet the purpose for which the license is to be
granted;
(6) the Owner and the Third Party Licensee
are engaged in or are reasonably likely to become engaged in a
dispute and the grant of such a license would effectively
abrogate the Owner's rights of enforcement as stated in
Section 3.11(c)(i);
(7) the license would violate or conflict
with any contractual obligation of the Owner;
(8) the Owner can demonstrate a significant,
near-term competitive harm to its business other than one
specified in subparts
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(1)-(7) above were the proposed license to be granted; or
(9) the Owner believes it is in its
strategic interest to reject or condition the proposed terms
of the License;
provided, however, that it shall not be deemed a sufficient reason to reject or
condition a proposed grant merely because the Owner itself could have granted a
license to the Third Party Licensee.
(C) No license shall become effective and no rights
shall be granted to a Third Party Licensee unless and until
the Owner has approved in writing all of the terms and
conditions of the proposed license.
(D) The Third Party Licensor may propose for approval
by the Owner the grant of a license to a Third Party Licensee
under the provisions of this Section 3.11 (c)(ii) only for one
or more of the following purposes:
(1) the Third Party Licensor and the Third
Party Licensee are engaged in a dispute involving
intellectual property, including a pre-litigation
dispute, and the proposed grant will materially
assist the Third Party Licensor in resolving such
dispute; or
(2) the Third Party Licensor and the Third
Party Licensee are engaged in or are preparing to
engage in negotiations to establish an alliance
between them, strategic to the Third Party Licensor's
business, for any of the following purposes:
(a) developing, manufacturing,
selling or distributing products or services
of the type developed, manufactured,
distributed or sold by the Third Party
Licensor at the Time of Distribution;
(b) pooling or cross-licensing
intellectual property to permit either the
Third Party Licensor or the Third Party
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Licensee to enter or remain in a market or
market sector blocked by the intellectual
property of either or both; or
(c) developing standards to be
adopted by a recognized standard setting
organization (e.g., ITU, ANSI);
and the proposed grant will materially assist the Third Party
Licensor in securing the alliance and provided that such
alliance is in fact established;
provided, however, that it shall not be deemed a sufficient
reason to propose or to grant a license under subpart (1) or
(2) of this subsection (D) that the Third Party Licensor may
recover or obtain from the Third Party Licensee revenue,
royalty or otherwise for such a grant unless such revenue is
incidental to a purpose expressed in subpart (1) or (2) of
this subsection (D).
(E) The Third Party Licensor shall bear all costs and
expenses associated with the grant of any license under this Section
3.11(c)(ii) and shall indemnify and hold harmless the Owner from and
against any and all Indemnifiable Losses it or its Representatives may
suffer on account of the grant of such a license or the relationship
created with the Third Party Licensee under such a license.
(F) Any revenue recovered by the Third Party Licensor
from the Third Party Licensee shall be [shared equally between the
Owner and the Third Party Licensor, net of licensing expenses].
(G) The Owner may, in its sole discretion, elect to
assign to the Third Party Licensor any one or more of the patents to be
licensed to the Third Party Licensee, subject to a retained interest in
favor of the Owner of a scope adequate for the Owner to conduct its
business.
(H) The rights granted between the parties under this
Section 3.11(c)(ii) shall expire five years from the Time of
Distribution; provided, however, that any license granted to a Third
Party
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Licensee may be made for the life of the patent rights underlying such
grant and all such licenses shall survive expiration of this Section
3.11(c)(ii) to the extent stated in such licenses.
(I) The rights granted between the parties under this
Section 3.11(c)(ii) are personal and nontransferable by either party to
any other Person, whether or not in connection with the sale of any
party's business or any portion thereof. The rights granted between the
parties under this Section 3.11(c)(ii) shall terminate upon a Change in
Control of either party; provided, however, that licenses granted prior
to such termination shall remain in full force and effect for the
duration of the license as specified in each such license.
(J) In any dispute between the parties arising under
the provisions of this Section 3.11(c)(ii) with respect to the right to
grant a license or the scope of such license, [the decision of the
Owner shall be final] [the [ ] of Rockwell and the [ ] of the Company
will attempt a good faith resolution of such dispute within thirty days
after either party notifies the other of such dispute. If such dispute
is not resolved within thirty days of such notification, such dispute
will be referred for resolution to the Chief Executive Officers of
Rockwell and the Company whose joint decision will be final and binding
on the parties].
(iii) In any situation qualifying for the grant of a license
under the provisions of Section 3.11(c)(ii), the party entitled to act
as Third Party Licensor, in addition to or in lieu of seeking the grant
of a license from the Owner under the provisions of Section
3.11(c)(ii), may request from the Owner the right to enforce patent(s)
owned by the Owner at the Time of Distribution against a third party if
such a right of enforcement is reasonably required to materially assist
the Third Party Licensor in resolving a dispute with respect to
intellectual property, including a pre-litigation dispute. If the right
to enforce the patent(s) is granted under this Section 3.11(c)(iii),
the Owner may elect to join any suit and be represented therein at its
own expense or to grant to the party
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granted such right to enforce such rights as may be necessary to confer
standing on such party. In the former event, the Owner shall retain any
damages awarded for infringement of the patent(s). In the latter event,
should the Owner nevertheless be joined in any suit as a proper or
necessary party, the party granted the right of enforcement shall bear
all costs and expenses of the Owner associated with such enforcement
and shall indemnify and hold harmless the Owner from and against any
and all Indemnifiable Losses it or its Representatives may suffer on
account thereof.
(d)(i) For purposes of this Section 3.11(d), the following
terms will have the following definitions:
(A) "Administrative Services" means services
pertaining to personnel, payroll, property management,
benefits, human resource management, financial planning, case
docketing and management, contract and subcontract management,
facilities management, proposal activities and other similar
services.
(B) "Administrative Services Software" means software
originated internally and owned by Rockwell or any of its
Subsidiaries (including, without limitation, members of the
Company Group) prior to the Time of Distribution and relating
to the provision of Administrative Services to the
Semiconductor Business immediately prior to the Time of
Distribution, regardless of where ownership of such software
vests after the Time of Distribution. Administrative Services
Software also shall include materials and documentation
supplied by one party to the other pursuant to clause (iv) of
this Section 3.11(d).
(C) "Transition Period" means the period from the
Time of Distribution until the termination or expiration of
the provision of services pursuant to the Transition
Agreement.
(ii) Anything contained herein to the contrary
notwithstanding, the following licenses shall govern the licensing of
Administrative Services Software.
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Effective as of the Time of Distribution, Rockwell, on behalf of itself
and the Rockwell Subsidiaries, hereby grants to the Company a
royalty-free, world-wide, irrevocable non-exclusive license under
Administrative Services Software which constitutes Rockwell Assets and
which is owned by the Rockwell Group or under which the Rockwell Group
has a right to license without the payment of royalties to a third
party immediately after the Time of Distribution to use such
Administrative Services Software only for the internal business
purposes of the Company Group, including the right to sublicense only
to (x) members of the Company Group and (y) service providers to use
the Administrative Services Software only for or on behalf of the
Company Group. Effective as of the Time of Distribution, the Company,
on behalf of itself and the Company Subsidiaries, hereby grants to
Rockwell Science Center a royalty-free, world-wide, irrevocable,
non-exclusive license under Administrative Services Software which
constitutes Semiconductor Assets and which is owned by the Company
Group or under which the Company Group has a right to license without
the payment of royalties to a third party immediately after the Time of
Distribution to use such Administrative Services Software for the
internal business purposes of the Rockwell Group, including the right
to sublicense only to (x) members of the Rockwell Group and (y) service
providers to use the Administrative Services Software only for or on
behalf of the Rockwell Group. Except as set forth in the preceding two
sentences, the licenses granted pursuant to this Section 3.11(d) do not
include the right to sublicense. Software originated or maintained
during the Transition Period by a party and relating to the provision
of Administrative Services to the other party pursuant to the
Transition Agreement shall be considered Administrative Services
Software subject to the above licenses provided that the party to be
licensed has paid a mutually agreeable share of the origination and/or
maintenance costs for such software and requests during the Transition
Period that such software be subject to such licenses.
(iii) Each party shall have the right to use, disclose,
perform, display, copy, distribute and make derivatives of the
Administrative Services
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Software within the scope of the licenses granted herein. Title to
Administrative Services Software and all rights therein, including,
without limitation, all rights in patents, copyrights and trade secrets
and any other intellectual property rights applicable thereto, shall
remain vested in the party to which ownership is allocated pursuant to
this Agreement. Notwithstanding anything to the contrary contained
herein, each licensed party agrees that it will not use, copy,
disclose, sell, assign or sublicense, or otherwise transfer
Administrative Services Software licensed to it under this Section
3.11(d) or any derivatives thereof, except as expressly provided in
this Section 3.11(d).
(iv) To the extent that a licensed party does not have
copies of any Administrative Services Software or materials and
documentation (such as source code listings, flow charts, user guides
and programmer's guides) relating to the operation and maintenance of
such Administrative Services Software to which the other party has
ownership, such owning party shall, as soon as practicable after
request of the licensed party, supply to the licensed party copies of
such Administrative Services Software and any related operating and
maintenance materials or documentation existing as of the Time of
Distribution.
(v) In the event that Administrative Services Software is
used by the owner in the ordinary course of its business either
associated or bundled with software owned or controlled by a third
party (e.g., as a suite of software), without which the Administrative
Services Software would be wholly or partly inoperable or otherwise
unfit for its intended purposes, the grant of the licenses under the
provisions of this Section 3.11(d) shall not be construed as an implied
license to use the software of such a third party or as an undertaking
on the part of the owner of the Administrative Services Software to
obtain a license to permit the use of such third party software.
(e)(i) For purposes of this Section 3.11(e), "Application
Software" means software originated internally and owned by Rockwell or
any of its
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Subsidiaries (including, without limitation, members of the Company
Group) prior to the Time of Distribution and relating to
computer-aided-design or other similar engineering or technical
analysis functions and related tools or utilities, regardless of where
ownership of such software vests after the Time of Distribution.
Anything contained herein to the contrary notwithstanding, Application
Software does not include any Administrative Services Software.
(ii) Anything contained herein to the contrary
notwithstanding, the following licenses shall govern the licensing of
Application Software. Effective as of the Time of Distribution,
Rockwell, on behalf of itself and the Rockwell Subsidiaries, hereby
grants to the Company a royalty-free, world-wide, irrevocable,
non-exclusive license under Application Software which constitutes
Rockwell Assets and which is owned by the Rockwell Group or under which
the Rockwell Group has a right to license without the payment of
royalties to a third party immediately after the Time of Distribution
to use, disclose, perform, display, copy, distribute and make
derivatives of such Application Software, in any form, in connection
with the Semiconductor Business or any related extensions or expansions
thereof to the same extent as was done in the Semiconductor Business at
the Time of Distribution, and the Company may sublicense only to (x)
members of the Company Group and (y) suppliers, subcontractors and
Affiliates of the Company Group only in connection with work performed
by them for the Company Group to the same extent as was done in the
Semiconductor Business at the Time of Distribution. Effective as of the
Time of Distribution, the Company, on behalf of itself and the Company
Subsidiaries, hereby grants to Rockwell Science Center a royalty-free,
world-wide, irrevocable, non-exclusive license under Application
Software which constitutes Semiconductor Assets and which is owned by
the Company Group or under which the Company Group has a right to
license without the payment of royalties to a third party immediately
after the Time of Distribution to use, disclose, perform, display,
copy, distribute and make derivatives of such Application Software, in
any form, in connection with businesses of the Rockwell Group or any
related extensions or
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expansions thereof to the same extent as was done in businesses of the
Rockwell Group (other than the Semiconductor Business) at the Time of
Distribution, and Rockwell Science Center may sublicense only to (x)
members of the Rockwell Group and (y) suppliers, contractors and
Affiliates of the Rockwell Group only in connection with work performed
by them for the Rockwell Group to the same extent as was done in
businesses of the Rockwell Group (other than the Semiconductor
Business) at the Time of Distribution. Except as set forth in the
preceding two sentences, the licenses granted pursuant to this Section
3.11(e) do not include the right to sublicense.
(iii) Title to Application Software and all rights therein,
including, without limitation, all rights in patents, copyrights and
trade secrets and any other intellectual property rights applicable
thereto, shall remain vested in the party to which ownership is
allocated pursuant to this Agreement. Notwithstanding anything to the
contrary contained herein, each licensed party agrees that it will not
use, copy, disclose, sell, assign, sublicense or otherwise transfer
Application Software licensed to it under this Section 3.11(e) or any
derivatives thereof, except as expressly provided in this Section
3.11(e).
(iv) In the event that Application Software is used by the
owner in the ordinary course of its business either associated or
bundled with software owned or controlled by a third party (e.g., as a
suite of software), without which the Application Software would be
wholly or partly inoperable or otherwise unfit for its intended
purposes, the grant of the licenses under the provisions of this
Section 3.11(e) shall not be construed as an implied license to use the
software of such a third party or as an undertaking on the part of the
owner of the Application Software to obtain a license to permit the use
of such third party software.
(f) Other Licenses. If any member of the Rockwell Group
requires a license with respect to any of the intellectual property contained in
the Semiconductor Assets which is not covered by this Section 3.11 with respect
to its businesses existing at the Time of Distribution, or if any member of the
Company Group
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requires a license with respect to any of the intellectual property contained in
the Rockwell Assets which is not covered by this Section 3.11 with respect to
its business existing at the Time of Distribution, upon notice of the party
requiring such a license, the parties will negotiate in good faith the grant of
such a license, upon reasonable terms, including royalties, permitting the
requesting party to undertake activities in fields of use which do not have an
adverse competitive effect on the businesses of the granting party and its
Affiliates.
(g)(i) Rockwell makes no representations or warranties of any
kind with respect to the validity, scope or enforceability of any
intellectual property rights licensed by Rockwell and the Rockwell
Subsidiaries pursuant to this Section 3.11 and Rockwell has no
obligation to file or prosecute any patent applications or maintain any
patents in force in connection therewith. Rockwell will, at no cost to
the Company Group, promptly execute or cause a member of the Rockwell
Group promptly to execute such further documents as the Company may
reasonably request as necessary or desirable to carry out the terms of
this Section 3.11. Notwithstanding anything contained herein to the
contrary, this Section 3.11 will not be applicable to any rights in and
use of the names, trademarks, trade names and service marks "Rockwell"
and "Rockwell International" and all corporate symbols and logos
related thereto and all names, trademarks, trade names and service
marks which include the words "Rockwell" or "Rockwell International" or
any derivative thereof.
(ii) The Company makes no representations or warranties of any
kind with respect to the validity, scope or enforceability of any
intellectual property rights licensed by the Company and the Company
Subsidiaries pursuant to this Section 3.11 and the Company has no
obligation to file or prosecute any patent applications or maintain any
patents in force in connection therewith. The Company will, at no cost
to Rockwell, promptly execute or cause a member of the Company Group
promptly to execute such further documents as Rockwell may reasonably
request as necessary or desirable to carry out the terms of this
Section 3.11.
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ARTICLE IV
MUTUAL RELEASE; INDEMNIFICATION
Section 4.01 Mutual Release. Effective as of the Time of Distribution
and except as otherwise specifically set forth in the Transaction Agreements,
each of Rockwell, on the one hand, and the Company, on the other hand, on its
own behalf and on behalf of each of its respective Subsidiaries, hereby releases
and forever discharges the other and its Subsidiaries, and its and their
respective officers, directors, agents, Affiliates, record and beneficial
security holders (including, without limitation, trustees and beneficiaries of
trusts holding such securities), advisors and Representatives (in their
respective capacities as such) and their respective heirs, executors,
administrators, successors and assigns, of and from all debts, demands, actions,
causes of action, suits, accounts, covenants, contracts, agreements, damages,
claims and Liabilities whatsoever of every name and nature, both in law and in
equity, which the releasing party has or ever had, which arise out of or relate
to events, circumstances or actions taken by such other party occurring or
failing to occur or any conditions existing at or prior to the Time of
Distribution; provided, however, that the foregoing general release shall not
apply to (i) any Liabilities (including, without limitation, Liabilities with
respect to indemnification or contribution) under the Transaction Agreements or
assumed, transferred, assigned, allocated or arising under any of the
Transaction Agreements (including, without limitation, any Liability that the
parties may have with respect to indemnification or contribution pursuant to any
Transaction Agreement for claims brought against the parties by third Persons)
and will not affect any party's right to enforce the Transaction Agreements in
accordance with their terms, (ii) any Liability arising from or relating to any
agreement, arrangement, commitment or undertaking described in Section
3.03(b)(ii) (including, without limitation, Ordinary Course Intercompany
Arrangements) or (iii) any Liability the release of which would result in the
release of any Person other than a Person released pursuant to this Section 4.01
(provided that the parties agree not to bring suit or permit any of their
Subsidiaries to bring suit against any Person with respect to any Liability to
the extent such Person would
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be released with respect to such Liabilities by this Section 4.01 but for to
this clause (iii)).
Section 4.02 Indemnification by Rockwell. Except as otherwise
specifically provided in any Transaction Agreement and subject to the provisions
of this Article IV, Rockwell shall indemnify, defend and hold harmless the
Semiconductor Indemnitees from and against, and pay or reimburse, as the case
may be, the Semiconductor Indemnitees for, all Indemnifiable Losses, as
incurred, suffered by any Semiconductor Indemnitee based upon, arising out of,
relating to or otherwise in connection with:
(a) businesses of Rockwell, the Rockwell Subsidiaries and
their respective predecessors (other than the Semiconductor Business) engaged in
at or prior to the Time of Distribution, the Rockwell Assets or Liabilities of
Rockwell or any Rockwell Subsidiary as of the Time of Distribution which are not
Semiconductor Liabilities (including, without limitation, the failure by
Rockwell or any other member of the Rockwell Group to pay, perform or otherwise
discharge such Liabilities in accordance with their terms), whether such
Indemnifiable Losses are based upon, arise out of or relate to or are otherwise
in connection with events, occurrences, actions, omissions, facts, circumstances
or conditions occurring, existing or asserted before, at or after the Time of
Distribution;
(b) any untrue statement or alleged untrue statement of a
material fact contained in the sections of the Form 10 listed on Schedule 4.2,
or any omission or alleged omission to state in such sections a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading; but only
in each case with respect to information relating to the Rockwell Group provided
by Rockwell expressly for use in the sections of the Form 10 listed on Schedule
4.2;
(c) the breach by any member of the Rockwell Group of any
agreement or covenant contained in a Transaction Agreement which does not by its
express terms expire at the Time of Distribution;
(d) the use by members of the Rockwell Group of any
trademarks, trade names or corporate symbols or
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logos pursuant to Section 3.09(d) or intellectual property licensed by the
Company and the Company Subsidiaries pursuant to Section 3.11;
(e) in the event the Company or a Company Subsidiary is a
Licensor that elects to assign intellectual property rights to a member of the
Rockwell Group as provided in Section 3.11(c)(iv), acts of the Licensee taken to
enforce, or in connection with the enforcement of, such intellectual property
rights;
(f) the enforcement by the Semiconductor Indemnitees of their
rights to be indemnified, defended and held harmless under this Agreement; or
(g) Western Atlas Litigation Liabilities pursuant to (x) a
final and non-appealable order, decree or judgment by a court of competent
jurisdiction in respect of the Western Atlas Litigation or (y) a settlement
arrangement which is approved in writing by Rockwell (which approval shall not
be unreasonably withheld) in respect of the Western Atlas Litigation; provided,
however, that, in each case, royalties payable by Rockwell in respect of Western
Atlas Litigation Liabilities are calculated on the same basis as used in
determining royalties payable by the Semiconductor Business in the Western Atlas
Litigation (it being understood that all other Liabilities in respect of the
Western Atlas Litigation are Semiconductor Liabilities).
Section 4.03 Indemnification by the Company. Except as otherwise
specifically provided in any Transaction Agreement and subject to the provisions
of this Article IV, the Company and the Company Subsidiaries shall indemnify,
defend and hold harmless the Rockwell Indemnitees from and against, and pay or
reimburse, as the case may be, the Rockwell Indemnitees for, all Indemnifiable
Losses, as incurred, suffered by any Rockwell Indemnitee based upon, arising out
of, relating to or otherwise in connection with:
(a) the Semiconductor Business, the Semiconductor
Assets or the Semiconductor Liabilities (including, without limitation,
(i) any guarantees or obligations to assure performance or perform
given or made by, or other Liabilities of, Rockwell or any Rockwell
Subsidiary with respect to the Semiconductor Business, (ii) the failure
by the
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Company or any other member of the Company Group to pay, perform or
otherwise discharge Semiconductor Liabilities in accordance with their
terms, (iii) any Liabilities relating to the Semiconductor Business for
which Rockwell has agreed to indemnify BNA and certain other Persons
pursuant to the Boeing Post-Closing Covenants Agreement and (iv) any
Liabilities relating to the Semiconductor Business for which Rockwell
has agreed to indemnify Meritor and certain other Persons pursuant to
the Meritor Distribution Agreement), whether such Indemnifiable Losses
are based upon, arise out of or relate to or are otherwise in
connection with events, occurrences, actions, omissions, facts,
circumstances or conditions occurring, existing or asserted before, at
or after the Time of Distribution;
(b) any untrue statement or alleged untrue statement
of a material fact contained in the Form 10, or any omission or alleged
omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, except in
each case with respect to information relating to the Rockwell Group
provided by Rockwell expressly for use in the sections of the Form 10
listed on Schedule 4.2;
(c) the breach by any member of the Company Group of
any agreement or covenant contained in a Transaction Agreement which
does not by its express terms expire at the Time of Distribution;
(d) the use by members of the Company Group of any
trademarks, trade names or corporate symbols or logos pursuant to
Section 3.09(b) or intellectual property licensed by Rockwell and the
Rockwell Subsidiaries pursuant to Section 3.11;
(e) in the event Rockwell or a Rockwell Subsidiary is
a Licensor that elects to assign intellectual property rights to a
member of the Company Group as provided in Section 3.11(c)(iv), acts of
the Licensee taken to enforce, or in connection with the enforcement
of, such intellectual property rights;
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(f) any Action or other claim alleging that any
Liability was improperly allocated to the Company Group or that any
Asset was improperly withheld from the Company Group, in each case
pursuant to any of the Transaction Agreements; or
(g) the enforcement by the Rockwell Indemnitees of
their rights to be indemnified, defended and held harmless under this
Agreement.
Section 4.04 Limitations on Indemnification Obligations. (a) The amount
which any party (an "Indemnifying Party") is or may be required to pay to an
Indemnitee in respect of Indemnifiable Losses or other Liability for which
indemnification is provided under this Agreement shall be reduced by any amounts
actually received (including, without limitation, Insurance Proceeds actually
received) by or on behalf of such Indemnitee (net of increased insurance
premiums and charges related directly and solely to the related Indemnifiable
Losses and costs and expenses (including, without limitation, reasonable legal
fees and expenses) incurred by such Indemnitee in connection with seeking to
collect and collecting such amounts) in respect of such Indemnifiable Losses or
other Liability (such net amounts are referred to herein as "Indemnity Reduction
Amounts"). If any Indemnitee receives any Indemnity Reduction Amounts in respect
of an Indemnifiable Loss for which indemnification is provided under this
Agreement after the full amount of such Indemnifiable Loss has been paid by an
Indemnifying Party or after an Indemnifying Party has made a partial payment of
such Indemnifiable Loss and such Indemnity Reduction Amounts exceeds the
remaining unpaid balance of such Indemnifiable Loss, then the Indemnitee shall
promptly remit to the Indemnifying Party an amount equal to the excess (if any)
of (A) the amount theretofore paid by the Indemnifying Party in respect of such
Indemnifiable Loss, less (B) the amount of the indemnity payment that would have
been due if such Indemnity Reduction Amounts in respect thereof had been
received before the indemnity payment was made. An insurer or other third party
who would otherwise be obligated to pay any claim shall not be relieved of the
responsibility with respect thereto or, solely by virtue of the indemnification
provisions hereof, have any subrogation rights with respect thereto, it being
expressly understood and agreed that no insurer or any other third party shall
be entitled to any benefit they
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would not be entitled to receive in the absence of the indemnification
provisions by virtue of the indemnification provisions hereof.
(b) In determining the amount of any Indemnifiable Losses,
such amount shall be (i) reduced to take into account any net Tax benefit
realized by the Indemnitee arising from the incurrence or payment by the
Indemnitee of such Indemnifiable Losses and (ii) increased to take into account
any net Tax cost incurred by the Indemnitee as a result of the receipt or
accrual of payments hereunder (grossed-up for such increase), in each case
determined by treating the Indemnitee as recognizing all other items of income,
gain, loss, deduction or credit before recognizing any item arising from such
Indemnifiable Losses.
Section 4.05 Procedures Relating to Indemnification. (a) If a claim or
demand is made against an Indemnitee, or an Indemnitee shall otherwise learn of
an assertion, by any Person who is not a party to this Agreement (or an
Affiliate thereof) as to which an Indemnifying Party may be obligated to provide
indemnification pursuant to this Agreement (a "Third Party Claim"), such
Indemnitee will notify the Indemnifying Party in writing, and in reasonable
detail, of the Third Party Claim reasonably promptly (and in any event within 20
business days) after becoming aware of such Third Party Claim; provided,
however, that failure to give such notification will not affect the
indemnification provided hereunder except to the extent the Indemnifying Party
shall have been actually prejudiced as a result of such failure (except that the
Indemnifying Party will not be liable for any expenses incurred during the
period in which the Indemnitee failed to give such notice). Thereafter, the
Indemnitee will deliver to the Indemnifying Party, promptly after the
Indemnitee's receipt thereof, copies of all notices and documents (including,
without limitation, court papers) received or transmitted by the Indemnitee
relating to the Third Party Claim.
(b) If a Third Party Claim is made against an Indemnitee, the
Indemnifying Party will be entitled to participate in or to assume the defense
thereof (in either case, at the expense of the Indemnifying Party) with counsel
selected by the Indemnifying Party and reasonably satisfactory to the
Indemnitee. Should the
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Indemnifying Party so elect to assume the defense of a Third Party Claim, the
Indemnifying Party will not be liable to the Indemnitee for any legal or other
expenses subsequently incurred by the Indemnitee in connection with the defense
thereof; provided that, if in the Indemnitee's reasonable judgment a conflict of
interest exists in respect of such claim or if the Indemnifying Party shall have
assumed responsibility for such claim with any reservations or exceptions, such
Indemnitee will have the right to employ separate counsel reasonably
satisfactory to the Indemnifying Party to represent such Indemnitee and in that
event the reasonable fees and expenses of such separate counsel (but not more
than one separate counsel for all Indemnitees similarly situated) shall be paid
by such Indemnifying Party. If the Indemnifying Party assumes the defense of any
Third Party Claim, the Indemnitee will have the right to participate in the
defense thereof and to employ counsel, at its own expense, separate from the
counsel employed by the Indemnifying Party, it being understood that the
Indemnifying Party will control such defense. The Indemnifying Party will be
liable for the fees and expenses of counsel employed by the Indemnitee for any
period during which the Indemnifying Party has failed to assume the defense
thereof (other than during any period in which the Indemnitee shall have failed
to give notice of the Third Party Claim as provided above). If the Indemnifying
Party assumes the defense of any Third Party Claim, the Indemnifying Party will
promptly supply to the Indemnitee copies of all correspondence and documents
relating to or in connection with such Third Party Claim and keep the Indemnitee
fully informed of all developments relating to or in connection with such Third
Party Claim (including, without limitation, providing to the Indemnitee on
request updates and summaries as to the status thereof). If the Indemnifying
Party chooses to defend a Third Party Claim, the parties hereto will cooperate
in the defense thereof (such cooperation to be at the expense, including,
without limitation, reasonable legal fees and expenses, of the Indemnifying
Party), which cooperation shall include the retention in accordance with this
Agreement and (upon the Indemnifying Party's request) the provision to the
Indemnifying Party of records and information which are reasonably relevant to
such Third Party Claim, and making employees available on a mutually convenient
basis to provide additional information and explanation of any material provided
hereunder.
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(c) No Indemnifying Party will consent to any settlement,
compromise or discharge (including the consent to entry of any judgment) of any
Third Party Claim without the Indemnitee's prior written consent (which consent
will not be unreasonably withheld); provided, that if the Indemnifying Party
assumes the defense of any Third Party Claim, the Indemnitee will agree to any
settlement, compromise or discharge of such Third Party Claim which the
Indemnifying Party may recommend and which by its terms obligates the
Indemnifying Party to pay the full amount of Indemnifiable Losses in connection
with such Third Party Claim and unconditionally and irrevocably releases the
Indemnitee completely from all Liability in connection with such Third Party
Claim; provided, however, that the Indemnitee may refuse to agree to any such
settlement, compromise or discharge (x) that provides for injunctive or other
nonmonetary relief affecting the Indemnitee or (y) that, in the reasonable
opinion of the Indemnitee, would otherwise materially adversely affect the
Indemnitee. Whether or not the Indemnifying Party shall have assumed the defense
of a Third Party Claim, the Indemnitee will not (unless required by law) admit
any liability with respect to, or settle, compromise or discharge, such Third
Party Claim without the Indemnifying Party's prior written consent (which
consent will not be unreasonably withheld).
(d) Any claim on account of Indemnifiable Losses which does
not involve a Third Party Claim will be asserted by reasonably prompt written
notice given by the Indemnitee to the Indemnifying Party from whom such
indemnification is sought. The failure by any Indemnitee so to notify the
Indemnifying Party will not relieve the Indemnifying Party from any liability
which it may have to such Indemnitee under this Agreement, except to the extent
that the Indemnifying Party shall have been actually prejudiced by such failure.
Any notice pursuant to this Section 4.05(d) will contain a statement, in
prominent and conspicuous type, that if the Indemnifying Party does not dispute
its liability to the Indemnitee with respect to the claim made in such notice by
notice to the Indemnitee prior to the expiration of a 30-calendar-day period
following the Indemnifying Party's receipt of the second notice of such claim,
the claim shall be conclusively deemed a liability of the Indemnifying Party. If
the Indemnitee has provided the Indemnifying Party two such notices not less
than 30 days
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apart and the Indemnifying Party does not notify the Indemnitee prior to the
expiration of a 30-calendar-day period following its receipt of the second such
notice that the Indemnifying Party disputes its liability to the Indemnitee
under this Agreement, such claim specified by the Indemnitee in such notice will
be conclusively deemed a liability of the Indemnifying Party under this
Agreement and the Indemnifying Party will pay the amount of such liability to
the Indemnitee on demand or, in the case of any notice in which the amount of
the claim (or any portion thereof) is estimated, on such later date when the
amount of such claim (or such portion thereof) becomes finally determined. If
the Indemnifying Party has timely disputed its liability with respect to such
claim, as provided above, the Indemnifying Party and the Indemnitee will proceed
in good faith to negotiate a resolution of such dispute and, if not resolved
through negotiations by the 120th day after notice of such claim was given to
the Indemnifying Party, the Indemnifying Party and the Indemnitee will be free
to pursue such remedies as may be available to such parties under this Agreement
or under applicable law.
(e) In the event of payment in full by an Indemnifying Party
to any Indemnitee in connection with any Third Party Claim, such Indemnifying
Party will be subrogated to and shall stand in the place of such Indemnitee as
to any events or circumstances in respect of which such Indemnitee may have any
right or claim relating to such Third Party Claim against any claimant or
plaintiff asserting such Third Party Claim or against any other Person. Such
Indemnitee will cooperate with such Indemnifying Party in a reasonable manner,
and at the cost and expense of such Indemnifying Party, in prosecuting any
subrogated right or claim.
(f) Notwithstanding anything contained herein to the contrary,
the Company shall promptly provide Rockwell with copies of all materials
received by the Company or filed by any party in connection with the Western
Atlas Litigation and shall promptly consult with Rockwell with respect to any
material action to be taken in respect of the Western Atlas Litigation.
Section 4.06 Remedies Cumulative. The remedies provided in this Article
IV shall be cumulative and shall not preclude assertion by any Indemnitee of any
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other rights or the seeking of any and all other remedies against any
Indemnifying Party.
Section 4.07 Survival of Indemnities. The obligations of each of
Rockwell and the Company under this Article IV will not terminate at any time
and will survive the sale or other transfer by any party of any assets or
businesses or the assignment by any party of any Liabilities with respect to any
Indemnifiable Losses of the other related to such assets, businesses or
Liabilities.
Section 4.08 Exclusivity of Tax Allocation Agreement. Notwithstanding
anything in this Agreement to the contrary, the Tax Allocation Agreement will be
the exclusive agreement among the parties with respect to all Tax matters,
including, without limitation, indemnification in respect of Tax matters.
ARTICLE V
ACCESS TO INFORMATION
Section 5.01 Access to Information. From and after the Time of
Distribution, Rockwell will, and will cause each Rockwell Subsidiary to, afford
to the Company and its Representatives (at the Company's expense) reasonable
access and duplicating rights during normal business hours and upon reasonable
advance notice to all Information within Rockwell's possession or control or in
the possession or control of a Rockwell Subsidiary relating to the Company, any
Company Subsidiary or the Semiconductor Business, insofar as such access is
reasonably required by the Company or any Company Subsidiary, subject to the
provisions below regarding Privileged Information. From and after the Time of
Distribution, the Company will, and will cause each Company Subsidiary to,
afford to Rockwell and its Representatives (at Rockwell's expense) reasonable
access and duplicating rights during normal business hours and upon reasonable
advance notice to all Information within the Company's possession or control or
in the possession or control of a Company Subsidiary relating to Rockwell, any
Rockwell Subsidiary or the businesses of the Pre-Distribution Group, insofar as
such access is reasonably required by Rockwell or any Rockwell Subsidiary,
subject to the provisions below regarding Privileged Information.
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Without limiting the foregoing, Information may be requested under this Article
V for audit, accounting, claims, litigation, insurance, environmental and safety
and tax purposes, as well as for purposes of fulfilling disclosure and reporting
obligations and for performing this Agreement and the transactions contemplated
hereby.
In furtherance of the foregoing:
(a) Each party acknowledges that (i) each of Rockwell and the
Company (and the members of the Rockwell Group and the Company Group,
respectively) has or may obtain Privileged Information; (ii) there are a number
of Actions affecting one or more of the members of the Rockwell Group and the
Company Group; (iii) the parties may have a common legal interest in Actions, in
the Privileged Information, and in the preservation of the confidential status
of the Privileged Information, in each case relating to the business of the
Rockwell Group or the Company Group; and (iv) both Rockwell and the Company
intend that the transactions contemplated by the Transaction Agreements and any
transfer of Privileged Information in connection therewith shall not operate as
a waiver of any potentially applicable privilege.
(b) Each of Rockwell and the Company agrees, on behalf of
itself and each member of the Group of which it is a member, not to disclose or
otherwise waive any privilege attaching to any Privileged Information relating
to the business of the Company Group or the Rockwell Group, respectively,
without providing prompt written notice to and obtaining the prior written
consent of the other, which consent will not be unreasonably withheld. In the
event of a disagreement between any member of the Rockwell Group and any member
of the Company Group concerning the reasonableness of withholding such consent,
no disclosure will be made prior to a final, nonappealable resolution of such
disagreement.
(c) Upon any member of the Rockwell Group or any member of the
Company Group receiving any subpoena or other compulsory disclosure notice from
a court, other Governmental Entity or otherwise which requests disclosure of
Privileged Information, in each case relating to the business of the Company
Group or the Rockwell Group, respectively, the recipient of the notice will
promptly provide to the other party (following the
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notice provisions set forth herein) a copy of such notice, the intended
response, and all materials or information relating to the other Group that
might be disclosed. In the event of a disagreement as to the intended response
or disclosure, unless and until the disagreement is resolved as provided in
Section 5.01(b), the parties will cooperate to assert all defenses to disclosure
claimed by either Group, at the cost and expense of the Group claiming such
defense to disclosure, and shall not disclose any disputed documents or
information until all legal defenses and claims of privilege have been finally
determined.
Section 5.02 Production of Witnesses. Subject to Section 5.01, after
the Time of Distribution, each of Rockwell and the Company will, and will cause
each member of the Rockwell Group and the Company Group, respectively, to, make
available to the other party and its Subsidiaries, upon written request and at
the cost and expense of the party so requesting, its directors, officers,
employees and agents as witnesses to the extent that any such Person may
reasonably be required (giving consideration to business demands of such
Representatives) in connection with any Actions or other proceedings in which
the requesting party may from time to time be involved, provided that the same
shall not unreasonably interfere with the conduct of business by the Group of
which the request is made.
Section 5.03 Retention of Records. Except as otherwise required by law
or agreed to in writing, if any Information relating to the business, assets or
Liabilities of a member of a Group is retained by a member of the other Group,
each of Rockwell and the Company will, and will cause the members of the Group
of which it is a member to, retain for the period required by the applicable
Rockwell records retention policy in effect immediately prior to the Time of
Distribution all such Information in such Group's possession or under its
control. In addition, after the expiration of such required retention period, if
any member of either Group wishes to destroy or dispose of any such Information,
prior to destroying or disposing of any of such Information, (1) Rockwell or the
Company, on behalf of the member of its Group that is proposing to dispose of or
destroy any such Information, will provide no less than 30 days' prior written
notice to the other party, specifying in reasonable detail the Information
proposed
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to be destroyed or disposed of, and (2) if, prior to the scheduled date for such
destruction or disposal, the recipient of such notice requests in writing that
any of the Information proposed to be destroyed or disposed of be delivered to
such requesting party, the party whose Group is proposing to dispose of or
destroy such Information promptly will arrange for the delivery of the requested
Information to a location specified by, and at the expense of, the requesting
party
Section 5.04 Confidentiality. Subject to Section 5.01, which shall
govern Privileged Information, from and after the Time of Distribution, each of
Rockwell and the Company shall hold, and shall use reasonable efforts to cause
its Affiliates and Representatives to hold, in strict confidence all Information
concerning the other party's Group in its possession or control or furnished to
it by such other party's Group pursuant to the Transaction Agreements or the
transactions contemplated thereby and will not release or disclose such
Information to any other Person, except its Affiliates and Representatives, who
will be bound by the provisions of this Section 5.04; provided, however, that
any member of the Rockwell Group or the Company Group may disclose such
Information to the extent that (a) disclosure is compelled by judicial or
administrative process or, in the opinion of such Person's counsel, by other
requirements of law (in which case the party required to make such disclosure
will notify the other party as soon as practicable of such obligation or
requirement and cooperate with the other party to limit the Information required
to be disclosed and to obtain a protective order or other appropriate remedy
with respect to the Information ultimately disclosed), or (b) such Person can
show that such Information was (i) available to such Person on a nonconfidential
basis (other than from a member of the other party's Group) prior to its
disclosure by such Person, (ii) in the public domain through no fault of such
Person or (iii) lawfully acquired by such Person from another source after the
time that it was furnished to such Person by the other party's Group, and not
acquired from such source subject to any confidentiality obligation on the part
of such source known to the acquiror, or on the part of the acquiror. Each party
acknowledges that it will be liable for any breach of this Section 5.04 by its
Representatives to whom such Information is disclosed by such party.
Notwithstanding the foregoing, each of
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Rockwell and the Company will be deemed to have satisfied its obligations under
this Section 5.04 with respect to any Information (other than Privileged
Information) if it exercises the same care with regard to such Information as it
takes to preserve confidentiality for its own similar Information.
ARTICLE VI
MISCELLANEOUS
Section 6.01 Entire Agreement; Construction. This Agreement and the
Ancillary Agreements, including, without limitation, any annexes, schedules and
exhibits hereto or thereto, and other agreements and documents referred to
herein and therein, will together constitute the entire agreement between the
parties with respect to the subject matter hereof and thereof and will supersede
all prior negotiations, agreements and understandings of the parties of any
nature, whether oral or written, with respect to such subject matter.
Notwithstanding any other provisions in the Transaction Agreements to the
contrary, (i) in the event and to the extent that there is a conflict between
the provisions of this Agreement and the provisions of the Employee Matters
Agreement or the Tax Allocation Agreement, the provisions of the Employee
Matters Agreement or the Tax Allocation Agreement, as appropriate, will control
and (ii) in the event and to the extent that there is a conflict between the
provisions of this Agreement and the provisions of any Conveyance and Assumption
Instruments, the provisions of this Agreement will control.
Section 6.02 Survival of Agreements. Except as otherwise contemplated
by the Transaction Agreements, all covenants and agreements of the parties
contained in the Transaction Agreements will remain in full force and effect and
survive the Time of Distribution.
Section 6.03 Expenses. Except as otherwise set forth in any Transaction
Agreement, all costs and expenses incurred through the Time of Distribution in
connection with the Distribution, the preparation, execution and delivery of the
Transaction Agreements and the consummation of the transactions contemplated
thereby will be charged to and paid by Rockwell (other than
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(i) the costs and expenses of the Company's credit facilities and (ii) costs and
expenses to the extent the same relate to operations of the Semiconductor
Business subsequent to the Time of Distribution (whether the costs and expenses
described in clauses (i) or (ii) are incurred and/or paid before, at or after
the Time of Distribution), which costs and expenses described in clauses (i) and
(ii) will be charged to and paid by the Company). Except as otherwise set forth
in any Transaction Agreement, all costs and expenses incurred following the Time
of Distribution in connection with implementation of the transactions
contemplated by the Transaction Agreements will be charged to and paid by the
party for whose benefit the expenses are incurred, with any expenses which
cannot be allocated on such basis to be split equally between the parties.
Section 6.04 Governing Law. This Agreement will be governed by and
construed in accordance with the internal laws of the State of New York
applicable to contracts made and to be performed entirely within such State,
without regard to the conflicts of law principles of such State.
Section 6.05 Notices. All notices, requests, claims, demands and other
communications required or permitted to be given hereunder will be in writing
and will be delivered by hand or telecopied or sent, postage prepaid, by
registered, certified or express mail or reputable overnight courier service and
will be deemed given when so delivered by hand or telecopied, or three business
days after being so mailed (one business day in the case of express mail or
overnight courier service). All such notices, requests, claims, demands and
other communications will be addressed as set forth below, or pursuant to such
other instructions as may be designated in writing by the party to receive such
notice:
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(a) If to Rockwell:
Rockwell International Corporation
000 Xxxxx Xxxxxxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Mr. W. Xxxxxxx Xxxxxx
Senior Vice President,
Finance and Planning and
Chief Financial Officer
Telecopy: (000) 000-0000
with a copy to:
Rockwell International Corporation
000 Xxxxx Xxxxxxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Xx., Esq.
Senior Vice President,
General Counsel and
Secretary
Telecopy: (000) 000-0000
(b) If to the Company:
[Rockwell Semiconductor Systems, Inc.]
0000 Xxxxxxxx Xxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000-0000
Attention: Xx. Xxxxxx X. Xxxxxx
President
Telecopy: (000) 000-0000
with a copy to:
[Rockwell Semiconductor Systems, Inc.]
0000 Xxxxxxxx Xxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000-0000
Attention: [ ]
[ ]
Telecopy: (949) 221-[ ]
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Section 6.06 Consent to Jurisdiction. Each of Rockwell and the Company
irrevocably submits to the exclusive jurisdiction of (i) the Court of Chancery
in and for the State of Delaware and the Superior Court in and for the State of
Delaware and (ii) the United States District Court for the District of Delaware,
for the purposes of any suit, action or other proceeding arising out of the
Transaction Agreements or any transaction contemplated thereby (and agrees not
to commence any action, suit or proceeding relating thereto except in such
courts). Each of Rockwell and the Company further agrees that service of any
process, summons, notice or document hand delivered or sent by U.S. registered
mail to such party's respective address set forth in Section 6.05 will be
effective service of process for any action, suit or proceeding in Delaware with
respect to any matters to which it has submitted to jurisdiction as set forth in
the immediately preceding sentence. Each of Rockwell and the Company irrevocably
and unconditionally waives any objection to the laying of venue of any action,
suit or proceeding arising out of the Transaction Agreements or the transactions
contemplated thereby in (i) the Court of Chancery in and for the State of
Delaware and the Superior Court in and for the State of Delaware or (ii) the
United States District Court for the District of Delaware, and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that any such action, suit or proceeding brought in any such court
has been brought in an inconvenient forum.
Section 6.07 Amendments. This Agreement cannot be amended, modified or
supplemented except by a written agreement executed by Rockwell and the Company.
Section 6.08 Assignment. Neither party to this Agreement will convey,
assign or otherwise transfer any of its rights or obligations under this
Agreement without the prior written consent of the other party in its sole and
absolute discretion, except that other than as expressly provided herein any
party may (without obtaining any consent) assign any of its rights hereunder to
a successor to all or any part of its business. Any such conveyance, assignment
or transfer requiring the prior written consent of another party which is made
without such consent will be void ab initio. No assignment of this Agreement
will relieve the assigning party of its obligations hereunder.
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Section 6.09 Captions; Currency. The article, section and paragraph
captions herein and the table of contents hereto are for convenience of
reference only, do not constitute part of this Agreement and will not be deemed
to limit or otherwise affect any of the provisions hereof. Unless otherwise
specified, all references herein to numbered articles or sections are to
articles and sections of this Agreement and all references herein to annexes or
schedules are to annexes and schedules to this Agreement. Unless otherwise
specified, all references contained in this Agreement, in any annex or schedule
referred to herein or in any instrument or document delivered pursuant hereto to
dollars or "$" shall mean United States Dollars.
Section 6.10 Severability. If any provision of this Agreement or the
application thereof to any Person or circumstance is determined by a court of
competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions hereof, or the application of such provision to Persons or
circumstances other than those as to which it has been held invalid or
unenforceable, will remain in full force and effect and will in no way be
affected, impaired or invalidated thereby. If the economic or legal substance of
the transactions contemplated hereby is affected in any manner adverse to any
party as a result thereof, the parties will negotiate in good faith in an effort
to agree upon a suitable and equitable substitute provision to effect the
original intent of the parties.
Section 6.11 Parties in Interest. This Agreement is binding upon and is
for the benefit of the parties hereto and their respective successors and
permitted assigns. This Agreement is not made for the benefit of any Person not
a party hereto, and no Person other than the parties hereto or their respective
successors and permitted assigns will acquire or have any benefit, right, remedy
or claim under or by reason of this Agreement, except that the provisions of
Sections 4.02 and 4.03 hereof shall inure to the benefit of the Persons referred
to therein.
Section 6.12 Schedules. All annexes and schedules attached hereto are
hereby incorporated in and made a part of this Agreement as if set forth in full
herein. Capitalized terms used in the schedules hereto but not otherwise defined
therein will have the
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respective meanings assigned to such terms in this Agreement.
Section 6.13 Termination. This Agreement may be terminated and the
Distribution abandoned at any time prior to the Time of Distribution by and in
the sole discretion of the Rockwell Board without the approval of the Company or
of Rockwell's shareowners. In the event of such termination, no party will have
any liability of any kind to any other party on account of such termination.
Section 6.14 Waivers; Remedies. The conditions to Rockwell's obligation
to consummate the Distribution are for the sole benefit of Rockwell and may be
waived in writing by Rockwell in whole or in part in Rockwell's sole discretion.
No failure or delay on the part of either Rockwell or the Company in exercising
any right, power or privilege hereunder will operate as a waiver thereof, nor
will any waiver on the part of either Rockwell or the Company of any right,
power or privilege hereunder operate as a waiver of any other right, power or
privilege hereunder, nor will any single or partial exercise of any right, power
or privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder. The rights and
remedies herein provided are cumulative and are not exclusive of any rights or
remedies which the parties may otherwise have at law or in equity.
Section 6.15 Further Assurances. From time to time after the
Distribution, as and when requested by either party hereto, the other party
shall execute and deliver, or cause to be executed and delivered, all such
documents and instruments and shall take, or cause to be taken, all such actions
as the requesting party may reasonably request to consummate the transactions
contemplated by the Transaction Agreements.
Section 6.16 Counterparts. This Agreement may be executed in separate
counterparts, each such counterpart being deemed to be an original instrument,
and all such counterparts will together constitute the same agreement.
Section 6.17 Performance. Each party will cause to be performed and
hereby guarantees the
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performance of all actions, agreements and obligations set forth herein to be
performed by any Subsidiary or Affiliate of such party.
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officers of the parties as of the date first
hereinabove written.
ROCKWELL INTERNATIONAL CORPORATION
By:
------------------------------------------
Xxxxxxx X. Xxxxxx, Xx.
Senior Vice President, General
Counsel and Secretary
[ROCKWELL SEMICONDUCTOR SYSTEMS,
INC.]
By:
------------------------------------------
[ ]
[ ]
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