AGREEMENT FOR INTERIM PAYMENT
EXHIBIT
99.1
AGREEMENT FOR INTERIM
PAYMENT
In
consideration of the mutual promises, covenants, terms and conditions herein
contained, LKI and Underwriters (as each are defined below) agree as of December
31, 2009 as follows:
DEFINITIONS
In this
Interim Payment Agreement, the singular includes the plural, and vice versa. The
following terms as used herein shall be given the following
meanings:
“Agreement”
shall mean this Interim Payment Agreement.
“Underwriters”
shall mean [Subject to a
request for confidential treatment; Separately filed with the
Commission].
“Parties”
shall mean the Underwriters and LKI collectively.
“LKI”
shall mean Xxxxxx Xxxxxx International Inc., all its past and present
affiliates, subsidiaries and the predecessors and successors of such
subsidiaries; their past and present parent companies, affiliates and their
predecessors, assigns and successors.
The
“[Subject to a request for
confidential treatment; Separately filed with the Commission] Policies”
shall mean [Subject to a
request for confidential treatment; Separately filed with the
Commission].
The
“[Subject to a request for
confidential treatment; Separately filed with the Commission] Policies”
shall mean [Subject to a
request for confidential treatment; Separately filed with the
Commission].
“Claim”
shall mean the claims submitted by LKI for losses under the [Subject to a request for
confidential treatment; Separately filed with the Commission]
Policies.
“Xxx and
Labor” shall mean costs and expenses incurred by or on behalf of LKI to take
such measures as were reasonable for the purpose of averting and mitigating its
losses and to otherwise insure that its rights in respect of the Insured
Interest were properly protected.
“Insured
Interest” shall mean those interests defined as “Insured Interest” in the [Subject to a request for
confidential treatment; Separately filed with the Commission]
Policies.
“Interim
Payment” shall mean a payment made under and by reason of this Agreement for an
amount less than the total amount of all losses sustained by LKI recoverable
under the [Subject to a request
for confidential treatment; Separately filed with the Commission]
Policies.
“Termination
Date” shall mean the latest date upon which Underwriters (a) pay any such
further indemnity to LKI in return for a final release for the same; (b)
otherwise secure a policy release for the [Subject to a request for
confidential treatment; Separately filed with the Commission] Policies
with LKI or, in the event of litigation, between the parties, (c) such
litigation is concluded either through settlement or judgment (after exhaustion
of all appeals and motions).
RECITALS
WHEREAS, Underwriters
severally subscribed to the [Subject to a request for
confidential treatment; Separately filed with the Commission] Policies;
and
WHEREAS, LKI timely submitted
Claims under the [Subject to a
request for confidential treatment; Separately filed with the Commission]
Policies against Underwriters for losses to certain Insured
Interests;
WHEREAS, LKI has
incurred costs and expenses to investigate the circumstances of the losses and
mitigate the losses as well as mitigate the consequential and collateral damage
to LKI as a result of such losses; and
WHEREAS, [Subject to a request for
confidential treatment; Separately filed with the Commission];
and
WHEREAS, the
Parties have entered into a confidentiality agreement, a copy of which is
annexed hereto and made a part hereof; and
WHEREAS, LKI has
submitted Claims under the [Subject to a request for
confidential treatment; Separately filed with the Commission] Policies
for amounts in excess of $[Subject to a request for
confidential treatment; Separately filed with the Commission];
and
WHEREAS, Underwriters agree to
make an Interim Payment to Xxxxxx Xxxxxx International, Inc. of US
$28,000,000.00 United States dollars;
REPRESENTATIONS AND
WARRANTIES
1.
The Parties represent and warrant that they are duly organized, validly
existing, and in good standing under the laws of the respective jurisdictions
where they are organized and, in respect of Underwriters, are licensed to
subscribe to contracts of insurance. The Parties further represent and warrant
that they have the full power and authority to enter into and perform this
Agreement and that the signatories are authorized to execute this Agreement on
behalf of their respective parties.
2.
LKI represents and warrants that (a) [Subject to a request for
confidential treatment; Separately filed with the Commission], (b) [Subject to a request for
confidential treatment; Separately filed with the Commission], (c) [Subject to a request for
confidential treatment; Separately filed with the Commission], (d) [Subject to a request for
confidential treatment; Separately filed with the Commission], and (e)
[Subject to a request for
confidential treatment; Separately filed with the
Commission].
3.
This Agreement has been duly executed and delivered by the Parties and
constitutes the legal, valid and binding obligation of the Parties, enforceable
against the other in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency or other similar laws
affecting creditors rights generally and except as rights to specific
enforcement may be limited by the application of equitable principles (whether
such equitable principles are applied in a proceeding at law or in
equity).
INTERIM
PAYMENT
4.
Underwriters shall pay Xxxxxx Xxxxxx International, Inc $28,000,000 [Subject to a request for
confidential treatment; Separately filed with the
Commission]. The aforementioned Interim Payment shall be made
by means of a wire transfer to account as set forth in the attached Wire
Instructions. [Subject to a
request for confidential treatment; Separately filed with the
Commission].
5.
The Parties agree that the terms and conditions contained in the Agreement and
the Interim Payment made hereunder are confidential. LKI and Underwriters
agree that they will not publicize, discuss, or disclose, or authorize their
agents, servants, employees, attorneys, or representatives to publicize,
discuss, or disclose, directly or indirectly, orally or in writing,
spontaneously or in response to an inquiry, to any entity or person, including
any party to the [Subject to a
request for confidential treatment; Separately filed with the
Commission] (other than the Underwriters to the [Subject to a request for
confidential treatment; Separately filed with the Commission] Policies
and their duly authorized representatives and LKI) the terms of the Agreement
and the Interim Payment except that LKI and Underwriters are permitted to
disclose the terms of the Agreement and the Interim Payment to: (a) [Subject to a request for
confidential treatment; Separately filed with the Commission]; (b) the
Underwriters to the [Subject to
a request for confidential treatment; Separately filed with the Commission]
Policies and their duly authorized representatives and (c) as otherwise
may be required by law or legal process.
6.
Except as otherwise specifically set forth herein, this Agreement does not
modify, alter or amend the [Subject to a request for
confidential treatment; Separately filed with the Commission]
Policies.
7.
Underwriters acknowledge that [Subject to a request for
confidential treatment; Separately filed with the
Commission].
8.
Subject to (a) the execution of any additional binding confidentiality
agreements that either of the Parties may require, (b) such limitations as are
applicable by reason of applicable laws related to the sale or transfer of
securities, (c) the rules of the American Stock Exchange and/or (d) its duties
to its shareholders, LKI will cooperate with Underwriters [Subject to a request for
confidential treatment; Separately filed with the Commission] under the
[Subject to a request for
confidential treatment; Separately filed with the Commission] Policies.
[Subject to a request for
confidential treatment; Separately filed with the
Commission]. Nothing in this document shall constitute a
waiver by any of the Parties to any evidentiary privilege to which they are
otherwise entitled to assert. Further, nothing in this Agreement
shall relieve LKI from its duty to cooperate with Underwriters [Subject to a request for
confidential treatment; Separately filed with the Commission], as
required by the terms of the [Subject to a request for
confidential treatment; Separately filed with the Commission] Policies
and at law.
9. LKI and Underwriters shall
negotiate in good faith and enter in such additional agreements as may be
reasonably necessary to allow [Subject to a request for
confidential treatment; Separately filed with the
Commission]. LKI and Underwriters shall meet at such times and
places as are reasonably necessary [Subject to a request for
confidential treatment; Separately filed with the Commission] But, LKI
shall have no obligation to disclose any documents or information that would
require LKI to: a) waive attorney client or a similar cognizable privilege; b)
breach a contract [Subject to a
request for confidential treatment; Separately filed with the
Commission], or (c) would subject LKI or any of its officers, directors,
employees or agents to liability or the potential for suit. Notwithstanding
LKI’s intent and desire [Subject to a request for
confidential treatment; Separately filed with the Commission] and to see
Underwriters recoup any payments made under the [Subject to a request for
confidential treatment; Separately filed with the Commission] Policies to
LKI [Subject to a request for
confidential treatment; Separately filed with the Commission] LKI,
Underwriters acknowledge that until the Termination Date, LKI has an obligation
to its shareholders to [Subject
to a request for confidential treatment; Separately filed with the Commission]
and Underwriters shall undertake no action and make no statements to any
third parties that might prejudice, impede, delay, reduce or adversely affect in
any fashion [Subject to a
request for confidential treatment; Separately filed with the
Commission].
10.
The Interim Payment of the sum of US $28,000,000.00 United States
dollars will be issued solely to Xxxxxx Xxxxxx International, Inc. whether on
account or otherwise, [Subject
to a request for confidential treatment; Separately filed with the
Commission] with respect to the [Subject to a request for
confidential treatment; Separately filed with the Commission] Policies
only to the extent of Interim Payment actually received by Xxxxxx
Xxxxxx International, Inc..
11.
In advancing such Interim Payment, Underwriters do not waive any of their rights
or privileges under the [Subject to a request for
confidential treatment; Separately filed with the Commission]
Policies. Underwriters reserve their right to disclaim
coverage pursuant to the terms and conditions of its contract of insurance.
Further, this Interim Payment shall not be construed as an admission of coverage
under the [Subject to a request
for confidential treatment; Separately filed with the Commission]
Policies. Further, in accepting such an Interim Payment,
LKI does not waive any of its rights or privileges under the [Subject to a request for
confidential treatment; Separately filed with the Commission] Policies
and reserve all of its rights under the [Subject to a request for
confidential treatment; Separately filed with the Commission] Policies
and arising as a matter of law, except as set forth in paragraph 13 in respect
of consequential damages
12. If,
at any time after the Termination Date should LKI recover the Insured Interests,
or any portion thereof, or receive payment for the Insured Interests for which
it makes claim herein, [Subject
to a request for confidential treatment; Separately filed with the
Commission], indemnifying LKI in whole or in part for the loss of the
Insured Interests then in that event LKI shall repay to Underwriters to the
extent of the actual receipt of any such recovery. Such repayment
shall be by the same terms as set forth in the [Subject to a request for
confidential treatment; Separately filed with the Commission] Policies
[Subject to a request for
confidential treatment; Separately filed with the
Commission].
13.
In consideration of the Interim Payment, the payment of the amounts for Xxx
and Labor and the commitment to reach
a decision by May 3, 2010 whether there is coverage for the Claims and if so,
the amount of payment for the same, LKI hereby agrees to
waive all rights at law, equity, or otherwise, to pursue against Underwriters
any claims for consequential, extra-contractual, or such other claims as may
sound in tort or any other legal theory, and hereby agrees to pursue only such
policy indemnity as exceeds the amount of the Interim Payment made hereunder.
For the avoidance of doubt, there can be no claim against Underwriters for
consequential loss.
XXX AND
LABOR
14. LKI shall make a submission
of Xxx and Labor claims under the [Subject to a request for
confidential treatment; Separately filed with the Commission] Policies to
Underwriters by [Subject to a
request for confidential treatment; Separately filed with the
Commission], Underwriters have the right to review and audit such
submission. Thereafter, Underwriters shall pay said claim for Xxx and Labor no
later than [Subject to a
request for confidential treatment; Separately filed with the
Commission], Underwriters shall have the right to make
reasonable inquiry of LKI with respect to such Xxx and Labor
submission including meeting with LKI and requesting supporting
documentation. LKI specifically reserves its right to make further
submissions of Xxx and Labor as such amounts are incurred or bills received
until the Termination Date and Underwriters shall have similar rights to review
and audit such further submissions. Underwriters will pay all such further
submissions of Xxx and Labor within a reasonable period of time after actual
receipt of supporting documentation but in no event later than May 3,
2010; thereafter, the parties reserve all of their rights with respect to
Xxx and Labor as set forth in the [Subject to a request for
confidential treatment; Separately filed with the Commission] Policies.
It is understood that LKI shall have no obligation to provide or disclose to
Underwriters any documentation or information that may breach attorney
client privilege or another cognizable privilege or any other
material that is otherwise subject to a confidentiality agreement or would
subject LKI or any of its officers, directors or employees or agents to
liability or the potential for suit.
ACCORD AND
SATISFACTION
15.
The Parties hereto expressly agree and acknowledge that this Agreement is not in
full and final accord, satisfaction and payment of the claims and disputes
between them; and that each of the Parties has entered into this Agreement
freely and voluntarily after consultation with independent counsel of each
party’s own choosing.
GOVERNING
LAW
16.
This Agreement shall be interpreted in accord with the laws of [Subject to a request for
confidential treatment; Separately filed with the Commission].
17. The Parties agree that the
[Subject
to a request for confidential treatment; Separately filed with the Commission]
shall have
exclusive jurisdiction over all disputes between them with respect to the
interpretation and enforcement of this Agreement, hereby expressly consenting to
and agreeing not to contest such exclusive jurisdiction and hereby irrevocably
consent to the personal and subject-matter jurisdiction of any such court for
all purposes necessary to effectuate this Paragraph. Each
Party agrees not to assert, by way of motion, as a defense, or otherwise, in any
such action, suit or proceeding, any claim that such party is not subject
personally to the jurisdiction of such court, that its property is exempt or
immune from attachment or execution, that the action, suit or proceeding is
brought in an inconvenient forum, that the venue of the action, suit or
proceeding is improper or that any dispute regarding this Agreement or the
subject matter hereof may not be enforced in or by such court. Each
Party further irrevocably submits to the jurisdiction of any such court in any
such action, suit or proceeding. Any and all service of process and
any other notice in any such action, suit or proceeding shall be effective
against either Party if given personally or by registered or certified mail,
return receipt requested, or by any other means of mail that requires a signed
receipt, postage prepaid. Nothing herein contained shall be deemed to
affect the right of either Party to serve process in any manner permitted by
law. Nothing in this Paragraph alters, modifies, amends, discharges
or deletes those provisions of the [Subject
to a request for confidential treatment; Separately filed with the Commission]
Policies that sets forth applicable law and jurisdiction for the
resolution of any disputes or claims regarding or under the [Subject
to a request for confidential treatment; Separately filed with the Commission]
Policies.
ENTIRE
AGREEMENT
18.
This Agreement constitutes the entire understanding between the Parties and
supersedes any and all prior and contemporaneous negotiations and agreements of
the Parties regarding the Interim Payment.
MODIFICATION
19.
Neither this Agreement nor any term set forth herein may be modified, changed,
waived, discharged, or terminated except by a writing signed by the
Parties.
NO
ADMISSION
20.
Nothing contained in this Agreement, nor the Agreement itself, shall be
admissible in any proceedings between the Parties, except to enforce the terms
hereof. Nothing contained in this Agreement shall be deemed to
constitute an admission of wrongdoing or liability by the Parties, or coverage
under the [Subject to a request
for confidential treatment; Separately filed with the Commission]
Policies issued by Underwriters. This Agreement does not
constitute, and shall not be construed to reflect, the adoption of any coverage
position by the Parties, nor will it have any bearing upon or relevance to the
interpretation or meaning of the terms, definitions, conditions or exclusions
contained in any policies of insurance. This Agreement does not
reflect upon the Parties view as to rights and obligations with respect to
matters or persons outside the scope of this Agreement. This
Agreement is without prejudice to positions taken by Underwriters with regard to
other insureds or claimants. The Parties specifically disavow any
intention to create rights in third parties under, or in relation to, this
Agreement.
EXECUTION
21.
This Agreement may be executed in identical counterparts. Each
counterpart hereof shall be deemed to be an original instrument, but all
counterparts hereof taken together shall constitute a single
document. Facsimile signatures shall be deemed
originals.
22. The
Parties agree to execute any and all documents reasonably necessary to implement
the terms and conditions of this Agreement.
SEVERABILITY
23.
If any provision of this Agreement other than Paragraph 4 is held to be illegal,
invalid or unenforceable under any present or future law, (a) such provision
will be fully severable, (b) this Agreement will be construed and enforced as if
such illegal, invalid or unenforceable provision had never comprised a part
hereof, and (c) the remaining provisions of this Agreement will remain in full
force and effect and will not be affected by the illegal, invalid or
unenforceable provision or by its severance.
24.
The Parties understand and agree that neither of them shall be deemed to be the
drafter hereof for purposes of construction of this Agreement.
25.
The Parties acknowledge that, except as provided herein, no representation of
fact or opinion has been made by any of the Parties, or anyone on their behalf,
to induce this compromise and Interim Payment.
UNITED STATES SECURITIES
LAWS
26.
Underwriters acknowledge that LKI is a publically traded company and is
regulated, inter alia, by the laws and regulations of the United
States as well as the exchange on which its stock is presently
traded. At no time will Underwriters seek LKI to make or refrain from
making any statement or for LKI to act or refrain from acting if such conduct
would be in violation of such laws or regulations. Additionally,
until the Termination Date those provisions of paragraphs 5 and 6 of
the Confidentiality Agreement between the parties dated December 23, 2009 shall
remain in full force and effect.
COSTS OF
ENFORCEMENT
27.
In the event of any dispute between the Parties regarding the enforcement of
this Agreement or any provision hereof, the Party prevailing in such dispute
shall be paid all of its fees and costs, including attorney fees related to such
dispute.
BINDING
EFFECT
28.
This Agreement and all the provisions contained herein shall be binding upon and
inure to the benefit of the Parties, their respective heirs, successors and
assigns, including but not limited to any receiver, trustee in bankruptcy,
representative or other person appointed under foreign or domestic bankruptcy,
receivership, or similar proceedings, except as otherwise set forth
herein.
29. Nothing in this Agreement
shall inure to the benefit of any third party and shall only inure to the
benefit of Underwriters [Subject to a request for
confidential treatment; Separately filed with the Commission]
Policies.
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Signed:
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By:
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Name
and Title
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[Subject
to a request for confidential treatment; Separately filed with the
Commission]
