Exhibit 2.6
MASTER TRANSITIONAL SERVICES AGREEMENT
between
XXXX XXX CORPORATION
and
COACH, INC.
TABLE OF CONTENTS
Page
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ARTICLE I SERVICES PROVIDED......................................................1
Section 1.1 Services Generally...........................1
Section 1.2 Service Boundaries...........................2
Section 1.3 Impracticability.............................2
Section 1.4 Additional Resources.........................2
Section 1.5 Additional Services..........................2
ARTICLE II TERM..................................................................2
ARTICLE III COMPENSATION.........................................................3
Section 3.1 Charges for Services.........................3
Section 3.2 Payment Terms................................4
Section 3.3 Pricing Adjustments..........................4
ARTICLE IV STANDARD OF CARE; GENERAL OBLIGATIONS.................................4
Section 4.1 Standard of Care: Xxxx Xxx..................4
Section 4.2 Standard of Care: Coach.....................4
Section 4.3 Transitional Nature of Services; Changes.....5
Section 4.4 Responsibility for Errors; Delays............5
Section 4.5 Good Faith Cooperation; Consents.............5
Section 4.6 Alternatives.................................5
ARTICLE V TERMINATION............................................................6
Section 5.1 .............................................6
Section 5.2 Survival.....................................7
Section 5.3 User IDs; Passwords..........................7
ARTICLE VI RELATIONSHIP BETWEEN THE PARTIES......................................7
ARTICLE VII SUBCONTRACTORS.......................................................7
ARTICLE VIII CONFIDENTIALITY.....................................................8
ARTICLE IX LIMITATION OF LIABILITY AND WARRANTY..................................8
Section 9.1 Xxxx Xxx'x Liability.........................8
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Section 9.2 Limitation of Liability......................8
Section 9.3 No Warranty..................................9
ARTICLE X FORCE MAJEURE..........................................................9
ARTICLE XI DISPUTE RESOLUTION....................................................9
Section 11.1 Dispute Resolution. .........................9
ARTICLE XII INDEMNIFICATION.....................................................11
Section 12.1 Indemnification of Xxxx Xxx by Coach........11
Section 12.2 Indemnification of Coach by Xxxx Xxx........11
Section 12.3 Term of Indemnity and Filing of Actions.....12
ARTICLE XIII MISCELLANEOUS......................................................12
Section 13.1 Entire Agreement............................12
Section 13.2 Governing Law and Jurisdiction..............12
Section 13.3 Descriptive Headings........................12
Section 13.4 Notices.....................................12
Section 13.5 Nonassignability............................13
Section 13.6 Severability................................13
Section 13.7 Failure or Indulgence Not Waiver; Remedies
Cumulative................................14
Section 13.8 Amendment...................................14
ARTICLE XIV DEFINITIONS.........................................................14
Section 14.1 Additional Services.........................14
Section 14.2 Ancillary Agreements........................14
Section 14.3 Audit.......................................14
Section 14.4 Coach Business..............................15
Section 14.5 Distribution Date...........................15
Section 14.5A Effective Date..............................
Section 14.6 Expiration Date.............................15
Section 14.7 Impracticable or Impracticability...........15
Section 14.8 IPO Closing Date............................15
Section 14.9 Master Separation Agreement.................15
Section 14.10 Person......................................15
Section 14.11 Service(s)..................................15
Section 14.12 Subcontractor...............................15
Section 14.13 Subsidiary..................................15
Section 14.14 Tax and Taxes...............................16
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Section 14.15 Tax Sharing Agreement.......................16
Section 14.16 Taxing Authority............................16
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SCHEDULES
Schedule 1 Transition Services Schedule...........................TSS-1
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MASTER TRANSITIONAL SERVICES AGREEMENT
This Master Transitional Services Agreement (the "Agreement")
dated as of August 24, 2000, between Xxxx Xxx Corporation, a Maryland
corporation ("Xxxx Xxx"), and Coach, Inc., a Maryland corporation ("Coach").
Capitalized terms used herein and not otherwise defined shall have the
meanings ascribed to such terms in Article XIV hereof.
WHEREAS, the Board of Directors of Xxxx Xxx and Coach have
each determined that it would be appropriate and desirable for Xxxx Xxx to
contribute and transfer to Coach, and for Coach to receive and assume,
directly or indirectly, assets and liabilities currently held by Xxxx Xxx and
associated with the Coach Business (the "Separation");
WHEREAS, prior to the Separation, Xxxx Xxx has provided
certain Services to Xxxx Xxx'x Coach division;
WHEREAS, Coach has requested from Xxxx Xxx that the Services
continue pursuant to this Agreement; and
WHEREAS, Xxxx Xxx agrees to provide and Coach agrees to be
provided with the Services on the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the foregoing and subject
to the terms, conditions, covenants and provisions of this Agreement, Xxxx
Xxx and Coach mutually covenant and agree as follows:
ARTICLE I
SERVICES PROVIDED
Section 1.1 SERVICES GENERALLY. Except as otherwise provided
herein, for the term determined pursuant to Article II hereof, Xxxx Xxx shall
provide or cause to be provided to Coach the service(s) described in the
Transition Services Schedule attached hereto, which schedule constitutes part
of this Agreement. Each service described on the Transition Services Schedule
shall be referred to herein as a "Service." Collectively, all the services
described on the Transition Services Sched ule (including Additional
Services) shall be referred to herein as "Services." Coach
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acknowledges that Xxxx Xxx is providing the Services as an accommodation to
Coach to allow Coach a period of time to obtain its own Services for the
Coach Business. During the term of this Agreement, Coach agrees that it shall
take all steps necessary to obtain its own Services prior to the expiration
of the term of this Agreement.
Section 1.2 SERVICE BOUNDARIES. Except as provided in the
Transition Services Schedule for a specific Service: (a) Xxxx Xxx shall be
required to provide the Services only to the extent and only at the locations
such Services are being provided by Xxxx Xxx for Coach immediately prior to
the Effective Date; and (b) the Services will be available only for purposes
of conducting the Coach Busi ness substantially in the manner it was
conducted prior to the Effective Date.
Section 1.3 IMPRACTICABILITY. Xxxx Xxx shall not be required
to provide any Service to the extent the performance of such Service becomes
commer cially impracticable as a result of a cause or causes outside the
reasonable control of Xxxx Xxx ("Impracticable" or "Impracticability"),
including, without limitation, to the extent the performance of such Services
would require Xxxx Xxx to violate any applicable laws, rules or regulations
or would result in the breach of any applicable contract.
Section 1.4 ADDITIONAL RESOURCES. Except as expressly provided
in the Transition Services Schedule for a specific Service, if at all, in
providing the Services, Xxxx Xxx shall not be obligated to: (a) hire or train
any additional employ ees; (b) maintain the employment of any specific
employee; (c) purchase, lease or license any additional equipment; or (d) pay
any costs related to the transfer or conversion of Coach's data to Coach or
any alternate supplier of Services.
Section 1.5 ADDITIONAL SERVICES. From time to time after the
Effective Date, if Coach would like Xxxx Xxx to provide any services in
addition to the Services provided in the Transition Services Schedule
("Additional Services"), Coach shall so notify Xxxx Xxx in writing. During
the thirty (30) days following the receipt of such notice, Xxxx Xxx and Coach
will mutually discuss such matter, including any additional charge relating
to the provision of Additional Services, and negotiate in good faith with a
view towards the provision of such Additional Services; PROVIDED, HOWEVER,
that nothing in this Section 1.5 shall create the obliga tion for Xxxx Xxx to
provide any such Additional Services.
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ARTICLE II
TERM
The term of this Agreement shall commence on the Effective
Date and shall remain in effect until two (2) years after the Effective Date
(the "Expira tion Date"), unless earlier terminated under Article V or as
otherwise provided in the Transition Services Schedule. This Agreement may be
extended beyond the Expiration Date by the mutual agreement of the parties in
writing for a specified period, either in whole or with respect to one or
more of the Services; PROVIDED, HOWEVER, that such extension shall only apply
to the Services for which the Agree ment was extended. The parties shall be
deemed to have extended this Agreement with respect to a specific Service if
the Transition Services Schedule specifies a completion date beyond the
aforementioned Expiration Date. The parties may agree on an earlier
expiration date with respect to a specific Service by specifying such date on
the Transition Services Schedule.
ARTICLE III
COMPENSATION
Section 3.1 CHARGES FOR SERVICES. As consideration for the
Services, Coach shall pay Xxxx Xxx a fee of $2,000,000 (the "Fee") for the
services identified on the Transition Services Schedule on the Effective Date
for the period commencing on the Effective Date and ending on the Expiration
Date, unless an additional charge is otherwise provided in the Transition
Services Schedule. Any additional charge contained in the Transition Services
Schedule shall be in addition to the Fee. In the event that this entire
Agreement is terminated in accordance with Article V of this Agreement before
the Expiration Date, Coach shall pay Xxxx Xxx an amount equal the product of
(a) the Fee multiplied by (b) a fraction, the numerator of which is equal to
the number of days that have elapsed from the Effective Date through the date
of termination of this Agreement and the denominator of which is equal to
730, all in addition to any additional charges contained in the Transition
Services Schedule incurred by Coach through the date of termination of this
Agreement. If the term of this Agreement is extended beyond the Expiration
Date as provided in Article II, Coach will pay Xxxx Xxx a fee equal to the
Fee pro rated according to the length of the additional term, plus ten
percent (10%) of such Fee, in addition to any additional charges contained in
the Transition Services Schedule for continued Services. If Additional
Services are added as provided in Section 1.5, Coach shall pay Xxxx Xxx any
additional fee to be
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negotiated by the parties at the time of the addition and the Fee shall be
adjusted accordingly. Coach and Xxxx Xxx shall each be responsible for their
own internal fees, costs and expenses (e.g., salaries of personnel) incurred
in connection with the provision of Services under this Agreement.
Section 3.2 PAYMENT TERMS. Xxxx Xxx shall xxxx Coach monthly
for one-twenty-fourth (1/24) of the Fee and monthly for any additional
charges contained in the Transition Services Schedule incurred during that
month. Coach shall pay Xxxx Xxx for all Services provided hereunder within
forty-five (45) days after receipt of an invoice therefor. Late payments
shall bear interest at the lesser of 12% or the maximum rate allowed by law.
Section 3.3 PRICING ADJUSTMENTS. In the event of a Tax Audit
adjustment relating to the pricing of any or all Services provided pursuant
to this Agreement in which it is determined by a Taxing Authority that any of
the charges, individually or in combination, did not result in an
arm's-length payment, as determined under generally accepted arm's-length
standards, then the parties, including any Xxxx Xxx subcontractor providing
Services hereunder, may agree to make corresponding adjustments to the
charges in question for such period to the extent necessary to achieve
arm's-length pricing. Any adjustment made pursuant to this Section 3.3 at any
time during the term of this Agreement or after termination of this Agreement
shall be reflected in the parties' legal books and records, and the resulting
underpayment or overpayment shall create, respectively, an obligation to be
paid in the manner specified in Section 3.2, or shall create a credit against
amounts owed under this Agreement.
ARTICLE IV
STANDARD OF CARE; GENERAL OBLIGATIONS
Section 4.1 STANDARD OF CARE: XXXX XXX. Subject to Section 1.4
and any other terms and conditions of this Agreement, Xxxx Xxx shall maintain
sufficient resources to perform its obligations hereunder. Xxxx Xxx shall use
reasonable efforts to provide Services in accordance with the policies,
procedures and practices of Xxxx Xxx in effect before the Effective Date and
shall exercise the same care and skill as it exercises in performing the same
or similar services for itself, with priority equal to that provided to its
own businesses or those of any of its affiliates, Subsidiaries or divisions.
Nothing in this Agreement shall require Xxxx Xxx to favor Coach over Xxxx
Xxx'x businesses or those of any of its affiliates, Subsidiaries or divisions.
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Section 4.2 STANDARD OF CARE: COACH. Coach shall use
reasonable efforts, in connection with receiving Services, to follow the
policies, procedures and practices of Xxxx Xxx in effect before the Effective
Date, including (a) complying with Xxxx Xxx'x global business practice
standards, (b) providing information and documenta tion sufficient for Xxxx
Xxx to perform the Services as they were performed before the Effective Date
and (c) making available, as reasonably requested by Xxxx Xxx, sufficient
resources and timely decisions, approvals and acceptances so that Xxxx Xxx
may accomplish its obligations hereunder in a timely manner.
Section 4.3 TRANSITIONAL NATURE OF SERVICES; CHANGES. The
parties acknowledge the transitional nature of the Services and that Xxxx Xxx
may make changes from time to time in the manner of performing the Services
if Xxxx Xxx is making similar changes in performing similar services for
itself and if Xxxx Xxx furnishes to Coach sixty (60) days prior written
notice regarding such changes.
Section 4.4 RESPONSIBILITY FOR ERRORS; DELAYS. Xxxx Xxx'x sole
responsibility to Coach:
(a) for errors or omissions in Services, shall be to
furnish correct information and/or adjust the Services, at no additional cost
or expense to Coach; PROVIDED, Coach must promptly advise Xxxx Xxx of any
such error or omission of which it becomes aware after having used reasonable
efforts to detect any such errors or omissions in accordance with the
standard of care set forth in Section 4.2; and
(b) for failure to deliver any Service because of
Impracticability, shall be to use reasonable efforts, subject to Section 1.4,
to make the Services available and/or to resume performing the Services as
promptly as reasonably practicable.
Section 4.5 GOOD FAITH COOPERATION; CONSENTS. The parties will
use good faith efforts to cooperate with each other in all matters relating
to the provision and receipt of Services. Such cooperation shall include
exchanging information, performing adjustments, and obtaining all third party
consents, licenses, sublicenses or approvals necessary to permit each party
to perform its obligations hereunder. The costs of obtaining such third party
consents, licenses, sublicenses or approvals shall be borne by Coach. The
parties will maintain, in accordance with each of their standard document
retention procedures, documentation supporting the information relevant to
cost calculations and cooperate with each other in making such information
available as needed in the event of a Tax Audit, whether in the United States
or any other country.
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Section 4.6 ALTERNATIVES. If Xxxx Xxx reasonably believes it
is unable to provide any Service because of a failure to obtain necessary
consents, licenses, sublicenses or approvals pursuant to Section 4.5 or
because of Impracticability, the parties shall cooperate to determine the
best alternative approach. Until such alternative approach is found or the
problem is otherwise resolved to the satisfaction of the parties, Xxxx Xxx
shall use reasonable efforts, subject to Section 1.3 and Section 1.4, to
continue providing the Service. To the extent an agreed upon alternative
approach incurs additional expense beyond which was incurred by the
underlying Service, Coach shall be responsible to make payment to Xxxx Xxx in
the amount of the additional expense unless the parties otherwise agree in
writing.
ARTICLE V
TERMINATION
Section 5.1 (a) Except as otherwise specifically provided in
the Transitional Services Schedule, this Agreement will automatically
terminate with respect to all Services on the date that Xxxx Xxx is no longer
required or allowed to consolidate Coach's results of operations and
financial position (determined in accordance with generally accepted
accounting principles consistently applied); PROVIDED, HOWEVER, that the term
of this Agreement may be extended by the mutual agreement of the parties in
writing for a specified period beyond such date, either in whole or with
respect or one or more of the Services. Xxxx Xxx shall provide at least sixty
(60) days prior written notice to Coach before the consummation of any
transaction resulting in Xxxx Xxx ceasing to be required or allowed to
consolidate Coach's results of operations and financial position.
(b) Coach may terminate this Agreement, either with respect to
all or with respect to any one or more of the Services provided to Coach
hereunder, for any reason or for no reason, at any time upon sixty (60) days
prior written notice to Xxxx Xxx; PROVIDED, HOWEVER, that the termination of
this Agreement with respect to one or more Services will not diminish or
otherwise affect Coach's obligation to pay the Fee except as set forth in
Article III or Section 5.1(d); PROVIDED FURTHER, that Coach does not have the
right to unilaterally reinstitute any such Service.
(c) Either party may terminate this Agreement with respect to
a specific Service if the other party materially breaches a material
provision with regard to that particular Service and does not cure such
breach (or does not take reasonable
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steps required under the circumstances to cure such breach going forward)
within sixty (60) days after being given notice of the breach; PROVIDED,
HOWEVER, that if such breach relates to a good faith dispute by the
non-terminating party, the non-terminating party may request that the parties
engage in a dispute resolution negotiation as specified in Article XI below
prior to termination for breach.
(d) This Agreement, the Master Separation Agreement and all
other Ancillary Agreements may be terminated at any time prior to the IPO
Closing Date by and in the sole discretion of Xxxx Xxx without the approval
of Coach and, if so terminated, all transactions taken in connection
therewith shall be void. This Agreement may be terminated at any time after
the IPO Closing Date and before the Distribution Date by mutual consent of
Xxxx Xxx and Coach. In the event of termination pursuant to this Section
5.2(d), no party shall have any liability of any kind to the other party.
Section 5.2 SURVIVAL. Without prejudice to the survival of the
Ancillary Agreements, the following obligations shall survive the termination
of this Agreement: (a) for the period set forth therein, the obligations of
each party under Articles VIII and XII and (b) Xxxx Xxx'x right to receive
the compensation for the Services provided. Notwithstanding the foregoing, in
the event of any termination with respect to one or more, but less than all
Services, this Agreement shall continue in full force and effect with respect
to any Services not terminated hereby.
Section 5.3 USER IDS; PASSWORDS. The parties shall use good
faith efforts at the termination or expiration of this Agreement or any
specific Service hereto to ensure that all applicable user IDs and passwords
are canceled.
ARTICLE VI
RELATIONSHIP BETWEEN THE PARTIES
The relationship between the parties established under this
Agreement is that of independent contractors and neither party is an
employee, agent, partner, or joint venturer of or with the other. Xxxx Xxx
will be solely responsible for any employment-related taxes, insurance
premiums or other employment benefits with respect to its personnel's
performance of Services under this Agreement. Coach agrees to grant Xxxx Xxx
personnel access to locations, systems and information (subject to the
provisions of confidentiality in Article VIII below) as necessary for Xxxx
Xxx to perform its obligations hereunder. Xxxx Xxx personnel agree to obey
any and all security regulations and other published policies of Coach.
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ARTICLE VII
SUBCONTRACTORS
Xxxx Xxx may engage a Subcontractor to perform all or any
portion of Xxxx Xxx'x duties under this Agreement, provided that any such
Subcontractor agrees in writing to be bound by confidentiality obligations at
least as protective as the terms of Article VIII regarding confidentiality
below, and provided further that Xxxx Xxx remains responsible for the
performance of such Subcontractor.
ARTICLE VIII
CONFIDENTIALITY
Section 4.5 of the Master Separation Agreement between the
parties shall apply to any Confidential Information, Confidential Operational
Information and Confidential Business Information (as each are defined
therein) which are the subject matter of this Agreement.
ARTICLE IX
LIMITATION OF LIABILITY AND WARRANTY
Section 9.1 XXXX XXX'X LIABILITY. In the absence of gross
negligence or willful misconduct on Xxxx Xxx'x part, and whether or not it is
negligent, Xxxx Xxx shall not be liable for any claims, liabilities, damages,
losses, costs, expenses (including, but not limited to, settlements,
judgments, court costs and reasonable attorneys' fees), fines and penalties,
arising out of any actual or alleged injury, loss or damage of any nature in
providing or failing to provide the Services to Coach. Xxxx Xxx'x liability
for damages to Coach for any cause, and regardless of the form of action,
whether in contract or in tort, including negligence, but excluding gross
negligence or willful misconduct, shall be limited to the payments made under
this Agreement for the specified Service that allegedly caused the damage
during the period in which the alleged damage was incurred by Coach. In no
event shall Xxxx Xxx be liable for any damages caused by Coach's failure to
perform Coach's responsibilities under this Agreement. Xxxx Xxx will not be
liable to Coach for any act or omission of any other entity (other than due
to a default by Xxxx Xxx in any agreement between Xxxx Xxx and such other
entity) furnishing any Service.
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Section 9.2 LIMITATION OF LIABILITY. NOTWITHSTAND ING ANYTHING
TO THE CONTRARY IN THIS AGREEMENT OR AT LAW OR IN EQUITY, NEITHER PARTY SHALL
BE LIABLE TO THE OTHER FOR PUNITIVE, SPECIAL, INDIRECT, INCIDENTAL OR
CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF
BUSINESS PROFITS, LOSS OF DATA, LOSS OF USE, BUSINESS INTERRUPTION OR ANY
OTHER LOSS) HOWEVER CAUSED, UNDER ANY THEORY OF LIABILITY, ARISING FROM OR
RELATING TO ANY CLAIM MADE UNDER THIS AGREEMENT OR REGARDING THE PROVISION OF
OR THE FAILURE TO PROVIDE THE SERVICES. THE FOREGOING LIMITATION WILL NOT
LIMIT EITHER PARTY'S OBLIGATIONS WITH RESPECT TO PAYMENT OF DAMAGES OF ANY
KIND INCLUDED IN AN AWARD OR SETTLEMENT OF A THIRD PARTY CLAIM UNDER ANY
INDEMNITY PROVISIONS SPECIFIED HEREIN. XXXX XXX SHALL HAVE NO LIABILITY OF
ANY KIND OR NATURE WHATSOEVER FOR XXXX XXX'X CEASING TO PROVIDE (OR HAVE A
THIRD PARTY PROVIDE) ANY SERVICE UPON THE EXPIRATION DATE OR OTHER
TERMINATION PURSUANT TO THIS AGREEMENT.
Section 9.3 NO WARRANTY. Coach hereby acknowledges that Xxxx
Xxx does not regularly provide to third parties services such as the Services
as part of its business and, except as set forth in Section 4.1 hereof, Xxxx
Xxx does not otherwise warrant or assume responsibility for its provision of
Services. The covenant in Section 4.1 hereof is in lieu of and exclusive of
all other representations and warranties of any kind whatsoever. THERE ARE NO
WARRANTIES RELATING TO THE SERVICES OF ANY KIND, EXPRESS OR IMPLIED,
INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE.
ARTICLE X
FORCE MAJEURE
Each party will be excused for any failure or delay in
performing any of its obligations under this Agreement, other than the
obligations of Coach to make certain payments to Xxxx Xxx pursuant to Article
III hereof for services rendered, if such failure or delay is caused by Force
Majeure. "Force Majeure" means any act of God or the public enemy, any
accident, explosion, fire, storm, earthquake, flood, or any other
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circumstance or event beyond the reasonable control of the party relying upon
such circumstance or event.
ARTICLE XI
DISPUTE RESOLUTION
Section 11.1 DISPUTE RESOLUTION.
(a) Any dispute, controversy or claim arising out of or
relating to this Agreement or the Ancillary Agreements or the breach,
termination or validity thereof ("Dispute") which arises between the parties
shall first be negotiated between appropriate senior executives of each party
who shall have the authority to resolve the matter. Such executives shall
meet to attempt in good faith to negotiate a resolution of the Dispute prior
to pursuing other available remedies, within 10 days of receipt by a party of
notice of a dispute, which date of receipt shall be referred to herein as the
"Dispute Resolution Commencement Date." Discussions and correspondence
relating to trying to resolve such Dispute shall be treated as confidential
information developed for the purpose of settlement and shall be exempt from
discovery or production and shall not be admissible in any subsequent
proceeding between the parties. If the senior executives are unable to
resolve the Dispute within thirty (30) days from the Dispute Resolution
Commencement Date, then, on the request of any party, the Dispute will be
mediated by a mediator appointed pursuant to the mediation rules of the
American Arbitration Association ("AAA"). Both parties will share the
administrative costs of the mediation and the mediator's fees and expenses
equally, and each party shall bear all of its other costs and expenses
related to the mediation, including but not limited to attorney's fees,
witness fees, and travel expenses. The mediation shall take place in Xxxx
County Illinois or in whatever alternative forum on which the parties may
agree.
(b) Any Dispute which the parties cannot resolve
through mediation within forty-five days of the appointment of the mediator,
shall at the request of any party be submitted to final and binding
arbitration under the then current Commercial Arbitration Rules of the AAA in
Xxxx County, Illinois. There shall be three (3) neutral arbitrators of whom
Xxxx Xxx shall appoint one and Coach shall appoint one within 30 days of the
receipt by the respondent of the demand for arbitration. The two arbitrators
so appointed shall select the chair of the arbitral tribunal within 30 days
of the appointment of the second arbitrator. If any arbitrator is not
appointed within the time limit provided herein, such arbitrator shall be
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appointed by the AAA by using a list striking and ranking procedure in
accordance with the Rules. Any arbitrator appointed by the AAA shall be a
retired judge or a practicing attorney with no less than fifteen years of
experience and an experienced arbitrator. The prevailing party in such
arbitration shall be entitled to be awarded its expenses, including its share
of administrative and arbitrator fees and expenses and reasonable attorneys'
and other professional fees, incurred in connection with the arbitration (but
excluding any costs and fees associated with prior negotiation or mediation).
The decision of the arbitrators shall be final and binding on the parties and
may be enforced in any court of competent jurisdiction.
(c) By agreeing to arbitration, the parties do not
intend to deprive any court of its jurisdiction to issue a pre-arbitral
injunction, pre-arbitral attachment, or other order in aid of arbitration
proceedings and the enforcement of any award. Without prejudice to such
provisional remedies as may be available under the jurisdiction of a court,
the arbitral tribunal shall have full authority to grant provisional remedies
or modify or vacate any temporary or preliminary relief issued by a court, to
issue an award for temporary or permanent injunctive relief (including
specific performance) and to award damages for the failure of any party to
respect the arbitral tribunal's orders to that effect.
(d) CONTINUITY OF SERVICE AND PERFORMANCE. Unless
otherwise agreed in writing or specifically provided in this Agreement, the
parties will continue to provide service and honor all other commitments
under this Agreement and each Ancillary Agreement during the course of
dispute resolution pursuant to the provisions of this Article XII with
respect to all matters not subject to such dispute, controversy or claim.
ARTICLE XII
INDEMNIFICATION
Section 12.1 INDEMNIFICATION OF XXXX XXX BY COACH. Coach
agrees to indemnify and hold harmless Xxxx Xxx and its directors, officer,
agents and employees (each, a "Xxxx Xxx Indemnified Person") from and against
any damages, and to reimburse each Xxxx Xxx Indemnified Person for all
reasonable expenses as they are incurred in investigating, preparing,
pursuing, or defending any claim, action, proceeding or investigation,
whether or not in connection with pending or threatened litigation and
whether or not any Xxxx Xxx Indemnified Person is a party (collectively,
"Actions"), arising out of or in connection with Services rendered or to be
rendered by
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any Xxxx Xxx Indemnified Person pursuant to this Agreement, the transactions
contemplated hereby or any Xxxx Xxx Indemnified Person's action or inactions
in connection with any such Services or transactions; PROVIDED that Coach
will not be responsible for any damages of any Xxxx Xxx Indemnified Person
that have resulted from such Xxxx Xxx Indemnified Person's gross negligence
or willful misconduct in connection with any of the advice, actions,
inactions, or Services referred to above.
Section 12.2 INDEMNIFICATION OF COACH BY XXXX XXX. Xxxx Xxx
agrees to indemnify and hold harmless Coach and its directors, officer,
agents and employees (each, a "Coach Indemnified Person") from and against
any damages, and will reimburse each Coach Indemnified Person for all
reasonable expenses as they are incurred in investigating, preparing,
pursuing, or defending any Action, arising out of the gross negligence or
willful misconduct of any Xxxx Xxx Indemnified Person in connection with the
Services rendered or to be rendered pursuant to this Agreement.
Section 12.3 TERM OF INDEMNITY AND FILING OF ACTIONS. The
indemnities contained in this Article XII shall survive for a period of three
(3) years after the termination of this Agreement for any reason, and any
claim for indemnity under this Article must be made by written notice to the
indemnifying party within one (1) year after the discovery thereof.
ARTICLE XIII
MISCELLANEOUS
Section 13.1 ENTIRE AGREEMENT. This Agreement, the Master
Separation Agreement and the other Ancillary Agreements and the Exhibits and
Schedules referenced or attached hereto and thereto constitute the entire
agreement between the parties with respect to the subject matter hereof and
thereof and shall supersede all prior written and oral and all
contemporaneous oral agreements and understandings with respect to the
subject matter hereof and thereof.
Section 13.2 GOVERNING LAW AND JURISDICTION. This Agreement
shall be construed in accordance with and all Disputes hereunder shall be
governed by the laws of the State of Illinois, excluding its conflict of law
rules. The parties agree that the Circuit Court of Xxxx County, Illinois
and/or the United States District Court for the Northern District of Illinois
shall have exclusive jurisdiction over all actions between the parties for
preliminary relief in aid of arbitration pursuant to Article XI herein, and
non exclusive jurisdiction over any action for enforcement of an arbitral
award.
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Section 13.3 DESCRIPTIVE HEADINGS. The headings contained in
this Agreement, in any Exhibit or Schedule hereto and in the table of
contents to this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement. Any
capitalized term used in any Exhibit or Schedule but not otherwise defined
therein, shall have the meaning assigned to such term in this Agreement. When
a reference is made in this Agreement to an Article or a Section, Exhibit or
Schedule, such reference shall be to an Article or Section of, or an Exhibit
or Schedule to, this Agreement unless otherwise indicated.
Section 13.4 NOTICES. Notices, offers, requests or other
communica tions required or permitted to be given by either party pursuant to
the terms of this Agreement shall be given in writing to the respective
parties to the following addresses or facsimile numbers:
if to Xxxx Xxx:
Xxxx Xxx Corporation
Three First National Plaza
00 Xxxx Xxxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: General Counsel
Facsimile No.: (000) 000-0000
if to Coach:
Coach, Inc.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
Facsimile No.: (000) 000-0000
or to such other address or facsimile number as the party to whom notice is
given may have previously furnished to the other in writing as provided
herein. Any notice involving non-performance, termination, or renewal shall
be sent by hand delivery, recognized overnight courier or, within the United
States, may also be sent via certified mail, return receipt requested. All
other notices may also be sent by facsimile, confirmed by first class mail.
All notices shall be deemed to have been given when received, if hand
delivered; when transmitted, if transmitted by facsimile or similar
electronic transmission method; one working day after it is sent, if sent by
recognized
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overnight courier; and three days after it is postmarked, if mailed first
class mail or certified mail, return receipt requested, with postage prepaid.
Section 13.5 NONASSIGNABILITY. Subject to Article VII, neither
party may, directly or indirectly, in whole or in part, whether by operation
of law or otherwise, assign or transfer this Agreement, without the other
party's prior written consent, and any attempted assignment, transfer or
delegation without such prior written consent shall be voidable at the sole
option of such other party. Notwithstanding the foregoing, each party (or its
permitted successive assignees or transferees hereunder) may assign or
transfer this Agreement as a whole without consent to an entity that succeeds
to all or substantially all of the business or assets of such party. Without
limiting the foregoing, this Agreement will be binding upon and inure to the
benefit of the parties and their permitted successors and assigns.
Section 13.6 SEVERABILITY. If any term or other provision of
this Agreement is determined by a court, administrative agency or arbitrator
to be invalid, illegal or incapable of being enforced by any rule of law or
public policy, all other conditions and provisions of this Agreement will
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated is not affected in any manner
materially adverse to any party. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the
parties shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner to the end that transactions contemplated hereby are
fulfilled to the fullest extent possible.
Section 13.7 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES
CUMULATIVE. If any term or other provision of this Agreement or the Exhibits
or Schedules attached hereto is determined by a court, administrative agency
or arbitrator to be invalid, illegal or incapable of being enforced by any
rule of law or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to either party. Upon such
determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good faith
to modify this Agreement so as to effect the original intent of the parties
as closely as possible in an acceptable manner to the end that transactions
contemplated hereby are fulfilled to the fullest extent possible.
Section 13.8 AMENDMENT. No change or amendment will be made to
this Agreement except by an instrument in writing signed on behalf of each of
the
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parties to such agreement.
ARTICLE XIV
DEFINITIONS
For the purpose of this Agreement, the following capitalized
terms shall have the following meanings:
Section 14.1 ADDITIONAL SERVICES. "Additional Services" shall
have the meaning set forth in Section 1.5.
Section 14.2 ANCILLARY AGREEMENTS. "Ancillary Agreements"
shall have the meaning set forth in the Master Separation Agreement.
Section 14.3 AUDIT. "Audit" shall have the meaning set forth
in the Tax Sharing Agreement.
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Section 14.4 COACH BUSINESS. "Coach Business" shall have the
meaning set forth in the Master Separation Agreement.
Section 14.5 DISTRIBUTION DATE. "Distribution Date" shall have
the meaning set forth in the Master Separation Agreement.
Section 14.5A EFFECTIVE DATE. "Effective Date" shall be the
date that is two days prior to the date on which the IPO Registration
Statement (as defined in the Master Separation Agreement) is declared
effective.
Section 14.6 EXPIRATION DATE. "Expiration Date" shall have the
meaning set forth in Article II.
Section 14.7 IMPRACTICABLE or IMPRACTICABILITY.
"Impracticable" and "Impracticability" shall have the meanings set forth in
Section 1.3.
Section 14.8 IPO CLOSING DATE. "IPO Closing Date" shall have
the meaning set forth in the Master Separation Agreement.
Section 14.9 MASTER SEPARATION AGREEMENT. "Master Separation
Agreement" shall mean that certain Master Separation Agreement between Xxxx
Xxx and Coach dated as of the date hereof.
Section 14.10 PERSON. "Person" means an individual, a
partnership, a corporation a limited liability company, an association, a
joint stock company, a trust, a joint venture, an unincorporated organization
or a governmental entity or any department, agency or political subdivision
thereof.
Section 14.11 SERVICE(S). "Service(s)" shall have the meaning
set forth in Section 1.1.
Section 14.12 SUBCONTRACTOR. "Subcontractor" means any
individual, partnership, corporation, firm, association, unincorporated
organization, joint venture, trust or other entity engaged to perform
hereunder.
Section 14.13 SUBSIDIARY. "Subsidiary" of any Person means a
corporation or other organization whether incorporated or unincorporated of
which at least a majority of the securities or interests having by the terms
thereof ordinary voting power to elect at least a majority of the board of
directors or others performing similar functions with respect to such
corporation or other organization is directly or indirectly owned or
controlled by such Person or by any one or more of its Subsidiaries, or by
such Person and one or more of its Subsidiaries; PROVIDED, HOWEVER, that no
Person that is not directly or indirectly wholly-owned by any other Person
shall be a Subsidiary of
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such other Person unless such other Person controls, or has the right, power
or ability to control, that Person. For purposes of this Agreement, Coach
shall be deemed not to be a subsidiary of Xxxx Xxx.
Section 14.14 TAX AND TAXES. "Tax" and "Taxes" shall have the
meanings set forth in the Tax Sharing Agreement.
Section 14.15 TAX SHARING AGREEMENT. "Tax Sharing Agreement"
means the Tax Sharing Agreement, attached as Exhibit E to the Master Separation
Agreement.
Section 14.16 TAXING AUTHORITY. "Taxing Authority" shall have the
meaning set forth in the Tax Sharing Agreement.
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IN WITNESS WHEREOF, each of the parties has caused this Agreement
to be executed on its behalf by its officers thereunto duly authorized on the
day and year first above written.
XXXX XXX CORPORATION
By:
--------------------------------
Name:
Title:
COACH, INC.
By:
--------------------------------
Name:
Title:
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TRANSITION SERVICES SCHEDULE
ACCOUNTING
- Accounting advice for specific transactions, as determined by Coach
- Administration of Employee Stock Purchase Plan for Xxxx Xxx stock, as
needed by Coach
- Review of filings to be made with the Securities and Exchange Commission,
as prepared by Coach
- Clearinghouse for all inter-company xxxxxxxx in all areas, as needed by
Coach
TREASURY
- Initial cash management, including working capital financing and the use of
the note account
- Assistance with the establishment of Coach bank credit facility
- Assistance with initial capital raising
- Assistance with lease analysis
- Assistance with foreign exchange/commodity hedging, as needed by Coach
INTERNAL AUDIT
- Coordination and performance of retail and factory store audits
ENVIRONMENTAL
- Right to participate in annual environment update training and periodic
environmental council meetings and training programs
- Access to BNA Environmental, Health and Safety
TAXATION
- Preparation and filing of all Tax Returns (as defined in the Tax Sharing
Agreement) described in Section 1.1(b) of the Tax Sharing Agreement, for so
long as Xxxx Xxx shall be required to prepare and file such Tax Returns
pursuant to the Tax Sharing Agreement; PROVIDED, that if Xxxx Xxx is
required, pursuant to the Tax Sharing Agreement, to prepare and file such
Tax Returns after the Expiration Date, then Xxxx Xxx and Coach shall be
deemed to have extended the term of this Agreement pursuant to Article II
with respect to Xxxx Xxx'x provision of such services, and Coach shall
compensate Xxxx Xxx pursuant to Article III.
- Tax planning to minimize federal, Puerto Rico, foreign and state income
taxes
LEGAL
- Advice and assistance on transactions out of the ordinary course
- Advice and assistance regarding filing requirements, communications
limitations and other matters relating to status as a public company
- Advice and assistance relating to the transition of trademark registration
and maintenance of database, and maintenance of such database until the
transition has been completed
- Advice and assistance with respect to international legal matters
INSURANCE
- Perform risk management and risk assessment services
- Pursuant to Indemnification and Insurance Matters Agreement, perform and
assist Coach in performing its own risk financing, including a full range
of property and liability insurance coverage
- Claims handling support
- Property conservation and loss control engineering
INFORMATION SERVICES
Until the Distribution Date, Coach shall continue to be entitled to receive
the following benefits with respect to information services pursuant to Xxxx
Xxx'x agreements with the following information service providers, PROVIDED,
HOWEVER, that (i) Xxxx Xxx'x agreements with such providers remain in effect
and (ii) Coach's receipt of benefits under such agreements do not violate the
terms or provisions of such agreements:
Vendor Description
------ -----------
MCI Long distance service: Coach shall be entitled to be
charged the same rates by the vendor as other
comparable Xxxx Xxx Subsidiaries enjoy under the
agreement (to the extent practicable)
Xxxx South Local Jax and Medley service: Coach shall be entitled
to be charged the same rates by the vendor as other
comparable Xxxx Xxx Subsidiaries enjoy under the
agreement (to the extent practicable)
Dell Personal computers and supplies: Coach shall be
entitled to be charged the same rates by the vendor as
other comparable Xxxx Xxx Subsidiaries enjoy under the
agreement (to the extent practicable)
QRS Electronic Interchange Network ("EDI") network: Coach
shall be entitled to be charged the same rates by the
vendor as other comparable Xxxx Xxx Subsidiaries enjoy
under the agreement (to the extent practica ble)
GE Information Services EDI network: Coach shall be entitled to receive its
pro rata portion of benefits under this agreement,
which is funded by Xxxx Xxx
Sterling Commerce EDI software (on Xxxx Xxx mainframe): Coach shall be
entitled to receive its pro rata portion of benefits
under this agreement, which is funded by Xxxx Xxx
Logility Planning software: Coach shall be entitled to receive
its pro rata portion of benefits under the agreement
SAP Enterprise Resource Planning system: Coach shall
continue to be a licensee of the vendor under the
agreement
Coach will also be entitled to use Xxxx Xxx'x mainframe under the same method
of cost allocation used by Xxxx Xxx with respect to its other consolidated
Subsidiaries for mail order, EDI and retail POS.
MISCELLANEOUS SERVICES
- Information technology services, maintenance and support, comparable to
services provided to Coach by Xxxx Xxx on the Effective Date
- Assistance with transitioning to stand-alone computer networking systems
- Right to participate in travel, purchasing, car leasing and relocation
services, comparable to such services available to Coach from Xxxx Xxx on
the Effective Date
- Assistance with investor relations services
To the extent that Xxxx Xxx ceases to provide the Miscellaneous Services listed
above to its own employees, Xxxx Xxx'x obligation to provide such services to
Coach under this Agreement shall terminate.
XXXX XXX DIRECT CALL CENTER SERVICES
Call center services comparable to the services provided by Xxxx Xxx to Coach as
of the Effective Date, including:
- Record product orders and catalog requests for the direct marketing
business
- Provide product care information
- Respond to questions regarding (magazine) advertised products
- Respond to questions regarding web site usage
- Provide store locator service
- Accept overflow calls transferred from Jacksonville, Florida consumer
service
The charge for the Xxxx Xxx Direct Call Center Services shall initially be
$0.83 per minute for labor and phone usage. Such charges shall be in addition
to the Fee as provided in the Agreement. Such charge may be increased from
time to time in the sole discretion of Xxxx Xxx, PROVIDED that any such
increase in the charge shall be comparable to rate increases or rates charged
to other recipients of such Xxxx Xxx services.
The provision of the Xxxx Xxx Direct Call Center Services shall only
terminate upon either Coach or Xxxx Xxx providing sixty (60) days prior
written notice of termination of such services to the other party.
NIHON XXXX XXX KK CORPORATION EMPLOYEES
Nihon Xxxx Xxx KK Corporation shall pay the salaries and expenses of the
employees of Coach, as of the date of this Agreement, located in Japan. Xxxx
Xxx shall send an invoice to Coach for such salaries and expenses on a
monthly basis, and Coach shall pay Xxxx Xxx in the amounts contained in such
invoices in accordance with the payment provisions contained in the
Agreement. Such charges shall be in addition to the Fee as provided in the
Agreement.
XXXX XXX OCEAN SERVICES AGREEMENT
Coach to continue to participate in the Xxxx Xxx Puerto Rico Ocean Freight
Committee which pools ocean freight volume to obtain better ocean freight
rates, including the new rates in effect as of the Effective Date. Coach will
receive invoices directly from the carrier, at Xxxx Xxx'x rate, for Coach's
portion of such ocean freight charges and Coach shall pay such carrier in the
amounts contained in such invoices in accordance with the payment provisions
contained in the invoice.
