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Exhibit 2
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DISTRIBUTION AGREEMENT
by and between
ROCKWELL INTERNATIONAL CORPORATION
and
[111 HOLDINGS, INC.]
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[ ], 1997
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS..........................................................1
Section 1.01 General.................................................1
ARTICLE II THE DISTRIBUTION...................................................16
Section 2.01 The Distribution.......................................16
Section 2.02 Fractional Shares......................................17
Section 2.03 Cooperation Prior to the
Distribution........................................17
Section 2.04 Rockwell Board Action; Conditions to
the Distribution....................................18
Section 2.05 Waiver of Conditions...................................20
Section 2.06 Disclosure.............................................20
ARTICLE III TRANSACTIONS RELATING TO THE DISTRIBUTION.........................20
Section 3.01 Intercorporate Reorganization..........................20
Section 3.02 Rockwell Group Obligations Relating
to the Automotive Business..........................23
Section 3.03 Intercompany Accounts and
Arrangements........................................24
Section 3.04 Cash Management........................................28
Section 3.05 The Automotive Board...................................28
Section 3.06 Resignations; Transfer of Stock Held
as Nominee..........................................28
Section 3.07 Automotive Certificate of
Incorporation and By-Laws; Rights Plan..............29
Section 3.08 Insurance..............................................30
Section 3.09 Use of Names, Trademarks, etc..........................33
Section 3.10 Consents...............................................36
Section 3.11 Cross-License of Intellectual Property.................37
ARTICLE IV MUTUAL RELEASE; INDEMNIFICATION....................................39
Section 4.01 Mutual Release.........................................39
Section 4.02 Indemnification by Rockwell............................40
Section 4.03 Indemnification by Automotive..........................41
Section 4.04 Limitations on Indemnification
Obligations.........................................42
Section 4.05 Procedures Relating to
Indemnification.....................................44
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Section 4.06 Remedies Cumulative....................................47
Section 4.07 Survival of Indemnities................................47
Section 4.08 Exclusivity of Tax Allocation
Agreement...........................................47
ARTICLE V ACCESS TO INFORMATION...............................................48
Section 5.01 Access to Information..................................48
Section 5.02 Production of Witnesses................................49
Section 5.03 Retention of Records...................................50
Section 5.04 Confidentiality........................................50
ARTICLE VI MISCELLANEOUS......................................................51
Section 6.01 Entire Agreement; Construction.........................51
Section 6.02 Survival of Agreements.................................52
Section 6.03 Expenses...............................................52
Section 6.04 Governing Law..........................................52
Section 6.05 Notices................................................53
Section 6.06 Consent to Jurisdiction................................54
Section 6.07 Amendments.............................................55
Section 6.08 Assignment.............................................55
Section 6.09 Captions; Currency.....................................55
Section 6.10 Severability...........................................55
Section 6.11 Parties in Interest....................................56
Section 6.12 Schedules..............................................56
Section 6.13 Termination............................................56
Section 6.14 Waivers; Remedies......................................56
Section 6.15 Counterparts...........................................57
Section 6.16 Performance............................................57
ANNEXES
Annex A - Employee Matters Agreement
Annex B - Tax Allocation Agreement
SCHEDULES
Schedule 1.1(a) - Automotive Former Businesses
Schedule 1.1(b) - Automotive Financial Instruments
Schedule 1.1(c) - Automotive Subsidiaries
Schedule 1.1(d) - Automotive By-Laws
Schedule 1.1(e) - Automotive Certificate of Incorporation
Schedule 1.1(f) - Shared Agreements
Schedule 3.1(c) - Reorganization Transactions
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Schedule 3.3(b)(ii) - Intercompany Agreements
Schedule 3.4 - Automotive Bank Accounts
Schedule 3.6 - Continuing Directors and Officers
Schedule 4.1 - Exceptions to Release
Schedule 4.2 - Certain Form 10 Sections
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DISTRIBUTION AGREEMENT
DISTRIBUTION AGREEMENT (this "Agreement"), dated as of
_________, 1997, by and between ROCKWELL INTERNATIONAL CORPORATION, a Delaware
corporation ("Rockwell"), and [111 HOLDINGS, INC.], a Delaware corporation and,
as of the date hereof, a wholly-owned subsidiary of Rockwell ("Automotive").
WHEREAS, the Rockwell Board (as defined herein) has determined
that it is appropriate and desirable to distribute all outstanding shares of
Automotive Common Stock (as defined herein) on a pro rata basis to the holders
of Rockwell Common Stock (as defined herein); and
WHEREAS, Rockwell and Automotive 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 may be asserted by or against, or otherwise affect, such Person.
"Affiliate" means, with respect to any specified Person, any
other Person that directly, or
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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.
"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 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 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;
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(iii) inventories, including 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 utility and design 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
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slogans and registrations and applications for registration thereof,
worldwide; (C) copyrights in copyrightable works, and all other rights
of authorship, worldwide, and all applications, registrations and
renewals in connection therewith; (D) mask works and semiconductor chip
rights, worldwide, and all applications, registrations and renewals in
connection therewith; (E) trade secrets and confidential business and
technical information (including 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); (F) computer and
electronic data processing programs and software, both source code and
object code (including 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;
(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.
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"Assigning Party" shall have the meaning ascribed thereto in
Section 3.10.
"Assumed Rockwell Liabilities" means Liabilities of the
Automotive Group as of the Time of Distribution which do not constitute
Automotive Liabilities and which relate to or arise in connection with any
business of Rockwell and the Rockwell Subsidiaries other than the Automotive
Business.
"Automotive" shall have the meaning ascribed thereto in the
preamble.
"Automotive 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 Automotive Group) and which are used
primarily in or relate primarily to the Automotive Business, as the same shall
exist as of such time, including, without limitation, all assets reflected in
the Automotive 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
Automotive Assets.
"Automotive Balance Sheet" means the balance sheet of the
Automotive Business as of [March 31, 1997] contained in the Form 10.
"Automotive Board" means the Board of Directors of Automotive.
"Automotive 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, manufacturing, selling, distributing,
installing, modifying, repairing, servicing and supporting drivetrain systems
and components for heavy-duty and medium-duty trucks, trailers, buses, coaches,
off-highway equipment, specialty vehicles and military vehicles (including,
without limitation, axles, brakes, braking systems, transmissions, suspension
systems, clutches, drivelines and Tripmaster(R) vehicle on-board computers),
(ii) the business engaged in at all times prior to the Time of Distribution by
the Pre-Distribution Group of researching, developing, designing,
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manufacturing, selling, distributing, installing, modifying, repairing,
servicing and supporting systems and components for passenger cars, light-,
medium and heavy-duty trucks and sport utility vehicles, including, without
limitation, roof, door, access control and seat adjusting systems, suspension
products and steel wheels, (iii) 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(a)
and (iv) activities related to any of the foregoing. Notwithstanding anything to
the contrary contained herein, the Automotive Business shall not include the
business previously and/or currently engaged in by the Pre-Distribution Group of
researching, developing, designing, manufacturing, selling, distributing,
installing, modifying, repairing, servicing and supporting automobile global
positioning systems and activities related thereto.
"Automotive Common Stock" means, collectively, the Common
Stock, par value $1.00 per share, of Automotive and the related Rights.
"Automotive Financial Instruments" means all credit
facilities, guaranties, foreign currency forward exchange contracts, comfort
letters, letters of credit and similar instruments related to the Automotive
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(b).
"Automotive Group" means Automotive and the Automotive
Subsidiaries.
"Automotive Indemnitees" means Automotive, each Affiliate of
Automotive, including the Automotive Subsidiaries, each of their respective
Representatives and each of the heirs, executors, successors and assigns of any
of the foregoing.
"Automotive Liabilities" means all of (i) the Liabilities of
any member of the Automotive Group under any Transaction Agreement to which it
is or becomes a party and (ii) the Liabilities based upon, arising out of,
relating to or otherwise in connection with the
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Automotive Assets or the Automotive 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 Automotive 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 Liabilities in respect of checks outstanding as of the
Time of Distribution relating to the Automotive Business, (C) all Liabilities in
respect of workers' compensation, automobile, general liability, products
liability and other claims and matters relating to the Automotive Business, (D)
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 Automotive Business (including claims for
medical and disability benefits), (E) all Liabilities for environmental matters
based upon, arising out of, relating to or otherwise in connection with the
Automotive Business, including, without limitation, Liabilities in respect of
any facility to the extent relating to the Automotive Business presently or
formerly owned or operated by any member of the Pre-Distribution Group and (F)
all Liabilities based upon, arising out of, relating to or otherwise in
connection with Contracts related to the Automotive 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.
"Automotive Subsidiary" means each Person listed on Schedule
1.1(c) which is a direct or indirect Subsidiary of Automotive as of the Time of
Distribution.
"BNA" means Boeing North American, Inc., a Delaware
corporation formerly named Rockwell International Corporation.
"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.
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"By-Laws" means Automotive's by-laws substantially in the form
attached hereto as Schedule 1.1(d).
"Certificate of Incorporation" means Automotive's certificate
of incorporation substantially in the form attached hereto as Schedule 1.1(e).
"Claims Administration" means the processing of claims made
under the Policies, including 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.
"Consents" means consents, waivers, approvals, allowances,
novations, authorizations, filings, registrations and notifications.
"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,
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
Automotive Common Stock owned by Rockwell on the Distribution Date.
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"Distribution Agent" means the distribution agent selected by
Rockwell to distribute the Automotive 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.
"Employee Matters Agreement" means the Employee Matters
Agreement between Rockwell and Automotive, 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
Automotive with the Commission to effect the registration of the Automotive
Common Stock pursuant to the Exchange Act, including all amendments thereto
filed by Automotive with the Commission prior to the Time of Distribution.
"Former Business" means any corporation, division, business
unit, business, assets, plants, product line, operations or contract (including
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 or production of
which has been discontinued, 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 Automotive 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
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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' 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
Automotive 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 Automotive 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.
"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
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or however arising (including, without limitation, whether 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 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.
"No-action Letter" means a letter from the staff of the
Commission indicating, among other things, that the Division of Corporation
Finance will not recommend enforcement action to the Commission if the
Distribution is effected without registration of the Automotive Common Stock
under the Securities Act of 1933, as amended.
"NYSE" means the New York Stock Exchange, Inc.
"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(c)(ii).
"Person" means any individual, partnership, joint venture,
corporation, limited liability entity, trust, unincorporated organization or
other entity (including a Governmental Entity).
"Policies" means all insurance policies and insurance
contracts of any kind of the Pre-Distribution
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Group which include Automotive, the Automotive Subsidiaries and/or the
Automotive Business within the definition of the named insured and which was or
is 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. Notwithstanding the above, Policies will not include
insurance policies of joint ventures of the Automotive Business with respect to
which Rockwell is not a named insured or Rockwell's political risk insurance
policy with National Union covering the Automotive Business' Ege Fren Sanayii ve
Ticaret A.S. joint venture in Turkey.
"Pre-Distribution Group" means (i) each of Rockwell,
Subsidiaries of Rockwell existing immediately prior to the Time of Distribution
(including members of the Automotive Group) and 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 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.
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"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 Automotive and First Chicago Trust
Company of New York, 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 Automotive
Group), other than the Automotive Assets. 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 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 Automotive 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 Assets" means the following:
(i) all cash, cash on hand, cash in transit, cash
equivalents, funds, certificates of deposit, similar instruments and
short-term investments held by Rockwell and its Subsidiaries and
Affiliates
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(other than members of the Automotive Group and joint ventures of the
Automotive Business) at the Time of Distribution;
(ii) all bank accounts of Rockwell and its Subsidiaries
and Affiliates (including members of the Automotive Group) and cash
contained therein, other than those listed in Schedule 3.4;
(iii) 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);
(iv) 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 include the words
"Rockwell" or "Rockwell International" or any derivative thereof (other
than as provided for in Section 3.09);
(v) all assets with respect to pension plans of
Rockwell and its Subsidiaries (including members of the Automotive
Group), other than as provided for in the Employee Matters Agreement;
(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 Automotive Business (whether
or not the same or similar services are provided to the Automotive
Business);
(viii) all refunds of Taxes, or recoveries of Taxes
from customers or other parties required by contract or otherwise to
indemnify Rockwell or its Subsidiaries or other Affiliates (including
members of the Automotive Group) for Taxes, attributable to payments of
Taxes made prior to the Time of Distribution, whether or not any refund
claims have been filed prior to the Time of Distribution; and
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(ix) all rights, causes of action and claims arising
out of any asset described in clauses (i) through (viii) above.
"Rockwell Subsidiary" means any Subsidiary of Rockwell other
than Automotive or any Automotive Subsidiary.
"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 the
Automotive Business, as well as other businesses of Rockwell or any Rockwell
Subsidiary (other than the Automotive Business), 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 in 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 Automotive nor any Automotive 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 Automotive, 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.
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"Third Party Claim" shall have the meaning ascribed thereto in
Section 4.05(a).
"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 Automotive which will be entered into on or prior to the
Distribution Date and will provide for various service and other relationships
between Rockwell and Automotive following the Distribution Date.
ARTICLE II
THE DISTRIBUTION
Section 2.01 The Distribution.
(a) Subject to Section 2.04, 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 down to the nearest whole share), a number of shares of Automotive
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 three, and Rockwell will instruct the Distribution Agent to make
book-entry 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, or to distribute on the
Distribution Date or as soon thereafter as practicable to each such holder of
record or designated transferee or transferees a certificate or certificates
representing, one share of Automotive Common Stock for every three shares of
Rockwell Common Stock so held. The Distribution will be effective as of the Time
of Distribution.
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(b) Rockwell and Automotive will each provide to the
Distribution Agent all information (including 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
Automotive Common Stock for every three shares of Rockwell Common Stock
outstanding as of the Record Date.
Section 2.02 Fractional Shares. Anything contained herein to
the contrary notwithstanding, no fractional shares of Automotive Common Stock
will be distributed to holders of Rockwell Common Stock in the Distribution.
Holders that are otherwise entitled to receive less than one whole share of
Automotive Common Stock in the Distribution will receive cash in lieu of such
fractional share as contemplated hereby. As soon as practicable after the
Distribution Date, Rockwell will direct the Distribution Agent to determine in
accordance with its customary practice the number of fractional shares of
Automotive Common Stock otherwise allocable to holders of record or beneficial
owners of Rockwell Common Stock as of the Record Date, to aggregate all such
fractional shares and sell as soon as practicable the whole shares obtained by
aggregating such fractional shares either in open market transactions or
otherwise, in each case at then prevailing trading prices, and to cause to be
distributed to each such holder or for the benefit of each such beneficial
owner, in lieu of any fractional share, such holder's or owner's ratable share
of the proceeds of such sale, after making appropriate deductions of the amount
required to be withheld for federal income tax purposes and after deducting an
amount equal to all brokerage charges, commissions and transfer taxes attributed
to such sale. Rockwell will direct the Distribution Agent to seek to aggregate
the shares of Rockwell Common Stock that may be held by any such beneficial
owner thereof through more than one account in determining the fractional share
allocable to such beneficial owner.
Section 2.03 Cooperation Prior to the Distribution. Prior to
the Distribution:
(a) Rockwell and Automotive 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
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disclosure concerning Automotive, the Distribution and such other matters as
Rockwell and Automotive may determine. Rockwell and Automotive will prepare, and
Automotive will file with the Commission, the Form 10, which will include or
incorporate by reference the Information Statement. Automotive 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 Automotive 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 Automotive will take all such action as may
be necessary or appropriate under the 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 Automotive will cause to be prepared, and
Automotive will file and use its reasonable best efforts to have approved, an
application for the listing on the NYSE of the Automotive Common Stock to be
distributed in the Distribution.
Section 2.04 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 2.05:
(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;
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(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 been declared effective by the
Commission;
(e) the Certificate of Incorporation, the By-Laws and the
Rights Plan shall each have been adopted and be in effect;
(f) the Automotive Common Stock shall have been approved for
listing upon notice of issuance on the NYSE;
(g) the transactions contemplated by Section 3.01 and Section
3.02 shall have been consummated in all material respects;
(h) Rockwell and Automotive 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.
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Section 2.05 Waiver of Conditions. Any or all of the
conditions set forth in Section 2.04 may be waived, in whole or in part, in the
sole discretion of the Rockwell Board; provided, however, that the condition set
forth in paragraph (a) of Section 2.04 will not be waived unless the Rockwell
Board determines in its sole discretion, based on an opinion of nationally
recognized tax counsel, that the Distribution will qualify as a tax-free
spin-off to the Rockwell's U.S. shareowners for federal income tax purposes
under Section 368(a)(1)(D) of the Code.
Section 2.06 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 2.04 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 Automotive
will take all actions necessary to increase the outstanding shares of Automotive
Common Stock so that, immediately prior to the Distribution, Rockwell will hold
a number of shares of Automotive Common Stock (rounded down 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 three.
(b) Subject to Section 3.10, prior to the Time of
Distribution, Rockwell and Automotive 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 Automotive or
an Automotive Subsidiary, as appropriate, any and all right, title and
interest of Rockwell and each of
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the Rockwell Subsidiaries in the Automotive Subsidiaries;
(ii) have Rockwell and each Rockwell Subsidiary assign
and transfer, or cause to be assigned and transferred, to Automotive or
an Automotive Subsidiary, as appropriate, any and all right, title and
interest of Rockwell and each of the Rockwell Subsidiaries in the
Automotive Assets;
(iii) have Automotive and each Automotive Subsidiary
assign and transfer, or cause to be assigned and transferred, to
Rockwell or a Rockwell Subsidiary, as appropriate, any and all right,
title and interest of Automotive and each of the Automotive
Subsidiaries in all of their Assets (including, without limitation, all
Rockwell Retained Assets) which do not constitute Automotive Assets;
(iv) have Rockwell and each Rockwell Subsidiary assign
and transfer, or cause to be assigned and transferred, to Automotive or
an Automotive Subsidiary, as appropriate, and have Automotive or an
Automotive 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 Automotive Liabilities;
and
(v) have Automotive and each Automotive 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) any 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 Xxxxx
00
00
will hold such Asset in trust for the benefit of the Person entitled thereto (at
the expense of the Person entitled thereto).
(c) Subject to Section 3.10, prior to the Time of
Distribution, Rockwell and Automotive 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 Automotive 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 Automotive 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 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 Automotive (on behalf of itself and each member of the
Automotive 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 and 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
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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 Assets, Subsidiaries and Liabilities contemplated
by this Section 3.01, and Rockwell and Automotive 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
Automotive Business.
(a) Automotive 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 Automotive Financial Instruments (it being understood
that all Liabilities in respect of Automotive Financial Instruments are
Automotive Liabilities).
(b) Automotive 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,
contingent,
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secondary, joint, several and other Liabilities in respect of bonds,
indemnities, assurances and Contracts (other than Automotive 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, contingent, secondary, joint, several or other Liability
arising out of or relating to the Automotive 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 Automotive 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
Automotive Liabilities).
(c) Automotive 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 or other Liabilities arising out of or
relating to the Automotive Business under Shared Agreements; provided, however,
that Automotive 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 Automotive Business are Automotive
Liabilities). No member of the Automotive Group will incur any Liabilities under
any Shared Agreement or extend or otherwise amend any Shared Agreement after the
Time of Distribution.
(d) Automotive's obligations under this Section 3.02 will
continue to be applicable to all Automotive Financial Instruments, bonds,
indemnities, assurances, Contracts and Shared Agreements identified at any time
by Rockwell, whether before, or after the Time of Distribution.
Section 3.03 Intercompany Accounts and Arrangements.
(a) Elimination of Intercompany Accounts. The parties will
take all action as may be necessary in order to settle or eliminate (whether
through repayment,
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forgiveness, contributions to capital or otherwise) as of the Time of
Distribution all intercompany receivables, payables and other balances between
Automotive and the Automotive Subsidiaries, on the one hand, and Rockwell and
the Rockwell Subsidiaries, on the other hand (after giving effect to the
transactions contemplated by Section 3.01).
(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,
Automotive, on behalf of itself and each other member of the Automotive
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 Automotive and/or any Automotive 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 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 agreements, arrangements, commitments
or understandings listed or described on Schedule 3.3(b)(ii); (C) any
agreements, arrangements, commitments or understandings to which any
Person other than the parties hereto and their respective Affiliates is
a party; (D) any other agreements, arrangements, commitments or
understandings that any of the Transaction Agreements expressly
contemplates will survive the Time of Distribution; and (E) any
agreements, arrangements, commitments or understandings between
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Automotive or any Automotive Subsidiary, on the one hand, and Rockwell
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 Automotive
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. Notwithstanding anything to the contrary
contained in the Transaction Agreements, all bank accounts set forth on Schedule
3.4 will constitute Automotive Assets and all other bank accounts of Rockwell
and its Subsidiaries (including members of the Automotive Group) will not
constitute Automotive Assets.
(b) Cash Balances. The parties (i) estimate that cash in bank
accounts set forth on Schedule 3.4 at the Time of Distribution and cash in
transit, cash on hand, cash equivalents, funds, certificates of deposit, similar
instruments and short-term investments held by members of the Automotive Group
at the Time of Distribution will collectively total approximately $35,000,000
and (ii) contemplate that in order to satisfy certain obligations of the
Automotive Group in connection with transactions preceding the Distribution, an
additional amount equal to $60,000,000 will be deposited in a bank account of an
Automotive Canadian Subsidiary at the Time of Distribution or invested in
short-term investments of an Automotive Canadian Subsidiary at the Time of
Distribution.
(c) Rockwell Customer Payments. Automotive will, and will
cause its Subsidiaries and Affiliates to,
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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 Automotive 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.
(d) Automotive Customer Payments. Rockwell will, and will
cause its Subsidiaries and Affiliates to, forward promptly to Automotive (for
the account of Automotive or its applicable Subsidiary) any customer payments in
respect of accounts receivable owed to any member of the Automotive 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 Automotive will
be liable for payment of checks relating to the Automotive Business
that are outstanding as of the Time of Distribution and Rockwell or a
Rockwell Subsidiary will be liable for payment of checks relating to
businesses of Rockwell and the Rockwell Subsidiaries other than the
Automotive Business that are outstanding as of the Time of
Distribution.
(ii) Automotive 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 included in Automotive Assets. Within three
business days after Automotive's request, Rockwell will reimburse
Automotive (by wire transfer) for all such amounts funded by Automotive
in respect of checks relating to businesses of
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Rockwell and the Rockwell Subsidiaries other than the Automotive
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 included in the Automotive Assets. No checks
relating to any businesses of the Rockwell Group (as constituted after
the Time of Distribution) will be issued on any accounts that
constitute Automotive Assets after the Time of Distribution.
(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 its disbursement or payroll accounts that are not included in the
Automotive Assets. Within three business days after Rockwell's request,
Automotive will reimburse Rockwell (by wire transfer to Rockwell's bank
account at Mellon Bank, N.A., Pittsburgh, Pennsylvania, account number
102-3474) for all such amounts funded by Rockwell or a Rockwell
Subsidiary in respect of checks relating to the Automotive Business
that are outstanding as of the Time of Distribution and presented for
payment after the Time of Distribution in its disbursement or payroll
accounts that are not included in the Automotive Assets. No checks
relating to the Automotive Business will be issued on any accounts of
Rockwell or any Rockwell Subsidiary that do not constitute Automotive
Assets 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 Automotive Board. Automotive and Rockwell will take
all actions which may be required to elect or otherwise appoint as directors of
Automotive, prior to the Time of Distribution, the persons named in the Form 10
to constitute the board of directors of Automotive 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
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later than the Time of Distribution, from all boards of directors or
similar governing bodies of Automotive or any other member of the Automotive
Group on which they serve, and from all positions as officers of Automotive or
any other member of the Automotive Group in which they serve, except as
otherwise specified on Schedule 3.6. Automotive will cause all of its employees
and directors and all of the employees and directors of each other member of the
Automotive Group to resign, not later than the Time of Distribution, from all
boards of 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 Automotive 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 Automotive to be such nominee as of and after the Time of
Distribution. Automotive will cause each of its employees, and each of the
employees of the other members of the Automotive 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 Automotive Group entity as an
agent or representative therefor after the Time of Distribution. Automotive will
cause each of its employees and each of the employees of the other members of
the Automotive 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 Automotive Certificate of Incorporation and By-Laws;
Rights Plan. Prior to the
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Time of Distribution, (a) the Automotive 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 Automotive, will approve the Certificate of Incorporation. Prior
to the Time of Distribution, the Automotive Board will adopt the Rights Plan and
declare a dividend of the Rights so that each share of Automotive Common Stock
issued and outstanding as of the Time of Distribution will initially have one
Right attached thereto.
Section 3.08 Insurance.
(a) Coverage. Coverage of Automotive and the Automotive Subsidiaries
under all Policies shall cease as of the Time of Distribution. From and after
the Time of Distribution, Automotive and the Automotive 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).
Automotive and the Automotive Subsidiaries will have no rights with respect to
any Policies, except that (i) Automotive will have the right to assert claims
(and Rockwell will use reasonable efforts to assist Automotive in asserting
claims) for any loss, liability or damage with respect to Automotive Assets
under Policies which are third-party "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) Automotive 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 efforts to assist
Automotive in connection therewith) under Policies which are third-party
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
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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 Automotive, (B) Rockwell and the Rockwell Subsidiaries may, at
any time, without liability or obligation to Automotive or any Automotive
Subsidiary (other than as set forth in Section 3.08(b)), amend, commute,
terminate, 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
efforts to assist Automotive in asserting claims under Occurrence Basis Policies
will include using reasonable efforts in assisting Automotive 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 Automotive).
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 Automotive and the Automotive Subsidiaries for
incidents occurring prior to the Time of Distribution but which are asserted
with the insurance carrier after the Time of Distribution.
(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 Automotive has rights to assert claims pursuant to Section
3.08(a), (i) Rockwell will give Automotive prior notice thereof and consult with
Automotive 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 Automotive its equitable share (based on the amount of
premiums paid by or allocated to the Automotive Business in respect of the
applicable Policy) of any net
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proceeds actually received by Rockwell from the insurance carrier of the
applicable 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) Automotive or an Automotive Subsidiary, as
appropriate, will be responsible for the Claims Administration
with respect to the claims of Automotive and the Automotive
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 Automotive will upon receipt of evidence thereof,
forthwith reimburse Rockwell for that portion of such premiums paid by Rockwell
as are attributable to the Automotive 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 or a Rockwell Subsidiary, on the one hand, and
Automotive or a Automotive Subsidiary, on the other hand, relating to the same
occurrence, Rockwell and Automotive 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(d) will be construed to limit or otherwise alter in any way
the indemnity obligations of the parties to this Agreement, including 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
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will become effective as of the Time of Distribution directors and/or officers
of Automotive or any Automotive 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 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), Automotive 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 Automotive 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 not constituting Automotive 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 Automotive Group will not hold
itself out as having any affiliation with the Rockwell Group. However,
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Automotive may, and may permit the other members of the Automotive Group to,
utilize without obligation to pay royalties to Rockwell the trademarks or trade
names "Rockwell" or "Rockwell International" or any corporate symbol or logo
related thereto or any thereof in connection with stationery, supplies, labels,
catalogs, vehicles and signs constituting Automotive Assets, and products of the
Automotive Business, after the Distribution Date, subject to the terms and
conditions of this Section 3.09(b):
(i) All documents constituting Automotive 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 no document within any of the above
categories A, B or F may be used by the Automotive Group for any
purpose within the stated period unless such document clearly and
prominently displays a statement, the form of which is approved
by Rockwell, to the effect that the Automotive Group was formerly
affiliated with Rockwell.
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(ii) All documents of the Automotive Business of
the type described in paragraph (i) above and displays and signs
of the type described in paragraph (iv) below may, for a period
of 10 years after the Distribution Date, contain a statement, the
form of which is approved by Rockwell, to the effect that the
Automotive Group was formerly affiliated with Rockwell.
(iii) All vehicles constituting Automotive
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. Automotive 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, Automotive will cause to be removed from
display at all facilities constituting Automotive Assets as of
the Time of Distribution 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 not constituting
Automotive Assets and Automotive 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 Automotive Business may have
applied thereto the trademarks or trade names "Rockwell" or
"Rockwell International" after the Distribution Date in the same
manner and to the same extent as applied at the Time of
Distribution.
(c) From and after the Distribution Date, the
Rockwell Group will not hold itself out as having an affiliation with the
Automotive Group. However, the Rockwell Group will have rights to use trademarks
or trade names or corporate symbols related thereto or any
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thereof constituting Automotive Assets in connection with stationery, supplies,
labels, catalogs, vehicles, signs and finished goods inventory not constituting
Automotive Assets as of the Time of Distribution 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 Automotive 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 Automotive 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 the other
party or parties thereto or other required Consent would constitute a breach
thereof or in any way impair the rights of any member of the Rockwell Group or
the Automotive 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 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
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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 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 all the parties that no 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, in consideration for the
rights granted by Automotive and the Automotive Subsidiaries pursuant to Section
3.11(b), hereby grants to the Automotive Group 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, except for trademarks,
trade names, service marks, trade dress or any other form of trade identity)
which constitute Rockwell Assets and which are owned by the Rockwell Group or
under which the Rockwell Group has a right to license immediately after the Time
of Distribution and which are used in the conduct of the businesses of the
Automotive 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 businesses of the
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Automotive Group being conducted at the Time of Distribution; said non-exclusive
license being transferable only in connection with the sale of all or any part
of the Automotive Business to which such intellectual property rights relate. To
the extent that the Automotive Group does not have copies of any information or
materials relating to such intellectual property rights, Rockwell will, upon
reasonable request, supply to the Automotive Group copies of any such
information or materials relating to such intellectual property rights. Rockwell
makes no representations or warranties of any kind with respect to the validity,
scope or enforceability of any such intellectual property rights licensed
hereunder 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 Automotive Group, promptly execute or cause a member of
the Rockwell Group promptly to execute such further documents as Automotive may
reasonably request as necessary or desirable to carry out the terms of this
Section 3.11(a). Notwithstanding anything contained herein to the contrary, this
Section 3.11(a) 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.
(b) Effective as of the Time of Distribution,
Automotive on behalf of itself and the Automotive Subsidiaries, in consideration
for the rights granted by Rockwell and the Rockwell Subsidiaries pursuant to
Section 3.11(a), hereby grants to the Rockwell Group 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, except for trademarks,
trade names, service marks, trade dress or any other form of trade identity)
which constitute Automotive Assets and which are owned by the Automotive Group
or under which the Automotive Group has a right to license immediately after the
Time of Distribution and which are used in the conduct of the businesses of the
Rockwell Group other than the Automotive Business at the Time of Distribution to
make, have made, use, import, sell or otherwise
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dispose of products, or to practice any process in connection therewith, in the
businesses of the Rockwell Group as conducted by the Rockwell Group at the Time
of Distribution; said non-exclusive license being transferable only in
connection with the 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
such intellectual property rights, Automotive will, upon reasonable request,
supply to the Rockwell Group copies of any such information or materials
relating to such intellectual property rights. Automotive makes no
representations or warranties of any kind with respect to the validity, scope or
enforceability of any such intellectual property rights licensed hereunder and
Automotive has no obligation to file or prosecute any patent applications or
maintain any patents in force in connection therewith. Automotive will, at no
cost to Rockwell, promptly execute or cause a member of the Automotive 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(b).
[Enforcement and sub-license provisions to be added]
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 Automotive, on
the other hand, on its own behalf and on behalf of each of its respective
Subsidiaries, 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,
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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 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),
(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 be released with respect to such Liabilities by this Section 4.01 but for
the proviso to this clause (iii)) or (iv) any matter set forth on Schedule 4.1.
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 Automotive Indemnitees from and against, and pay or reimburse, as
the case may be, the Automotive Indemnitees for, all Indemnifiable Losses, as
incurred, suffered by any Automotive 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 Automotive Business) engaged
in at or prior to the Time of Distribution or Assets or Liabilities of Rockwell
or any Rockwell Subsidiary as of the Time of
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Distribution which are not Automotive Assets or Automotive Liabilities
(including, without limitation, the failure by Rockwell or any other member of
the Rockwell Group to pay, perform or otherwise discharge any 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 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; 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; or
(d) the enforcement by the Automotive Indemnitees of
their rights to be indemnified, defended and held harmless under this Agreement.
Section 4.03 Indemnification by Automotive. Except as
otherwise specifically provided in any Transaction Agreement and subject to the
provisions of this Article IV, Automotive and the Automotive 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 Automotive Business, the Automotive
Assets or the Automotive 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
Automotive
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Business, (ii) the failure by Automotive or any other member of
the Automotive Group to pay, perform or otherwise discharge
Automotive Liabilities in accordance with their terms and (iii)
any Liabilities relating to the Automotive Business for which
Rockwell has agreed to indemnify BNA and certain other Persons
pursuant to the Boeing Post-Closing Covenants 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
Automotive 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) any Action or other claim alleging that
any Liability was improperly allocated to the Automotive Group or
that any Asset was improperly withheld from the Automotive Group,
in each case pursuant to any of the Transaction Agreements; or
(e) 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
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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 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 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,
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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 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 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
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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 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.
(c) 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,
without the Indemnitee's prior written consent, the Indemnifying Party will not
consent to any settlement,
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compromise or discharge of a Third Party Claim (including the consent to entry
of any judgment), and 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 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
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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.
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 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 Automotive 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 indemnification in respect of Tax matters.
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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 Automotive and its Representatives (at Automotive'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
Automotive, any Automotive Subsidiary or the Automotive Business, insofar as
such access is reasonably required by Automotive or any Automotive Subsidiary,
subject to the provisions below regarding Privileged Information. Similarly,
from and after the Time of Distribution, Automotive will, and will cause each
Automotive 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
Automotive's possession or control or in the possession or control of an
Automotive Subsidiary relating to Rockwell, any Rockwell Subsidiary or the
businesses of the Pre-Distribution Group (other than the Automotive Business),
insofar as such access is reasonably required by Rockwell or any Rockwell
Subsidiary, subject to the provisions below regarding Privileged Information.
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
Automotive (and the members of the Rockwell Group and the Automotive 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
Automotive 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
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or the Automotive Group; and (iv) both Rockwell and Automotive 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 Automotive 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 Automotive 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 Automotive 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 Automotive 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 Automotive Group or the Rockwell Group, respectively, the recipient of the
notice will promptly provide to the other party (following the 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 Automotive will, and
will cause each member of the Rockwell Group and the Automotive Group,
respectively, to, make available to the other party and its Subsidiaries, upon
written request and at the cost
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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 Automotive 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 Automotive, 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 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 Automotive 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
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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 Automotive 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, or on the part of the acquiror, known to
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 Rockwell and Automotive
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 any annexes, schedules and exhibits
hereto or thereto, and other agreements and documents referred to herein and
therein, will together constitute the entire agreement
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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 Rockwell (other than the costs and
expenses of Automotive's credit facilities and costs and expenses to the extent
the same relate to operations of the Automotive Business subsequent to the Time
of Distribution, which will be charged to Automotive). 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 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
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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:
(a) If to Rockwell:
Rockwell International Corporation
0000 Xxxx Xxxxx Xxxxxxxxx
Xxxx Xxxxx, Xxxxxxxxxx 00000-0000
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
0000 Xxxx Xxxxx Xxxxxxxxx
Xxxx Xxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxx, Xx., Esq.
Senior Vice President,
General Counsel and
Secretary
Telecopy: (000) 000-0000
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(b) If to Automotive:
[111 Holdings, Inc.]
0000 Xxxx Xxxxx Xxxx
Xxxx, Xxxxxxxx 00000-0000
Attention: Xx. Xxxxxx X. Xxxxxx
Senior Vice President and
Chief Financial Officer
Telecopy: (000) 000-0000
with a copy to:
[111 Holdings, Inc.]
0000 Xxxx Xxxxx Xxxx
Xxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxxxxxx, Esq.
Senior Vice President,
General Counsel and
Secretary
Telecopy:
Section 6.06 Consent to Jurisdiction. Each of Rockwell and
Automotive 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 Automotive 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 Automotive 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
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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
Automotive.
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 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.
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 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
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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 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 Automotive 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 Automotive 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
Automotive 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
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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. 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 6.16. Performance. Each party will cause to be
performed and hereby guarantees the 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:
------------------------
Name:
Title:
[111 HOLDINGS, INC.]
By:
------------------------
Name:
Title:
57
