EXHIBIT 10.14
Settlement Agreement and Release
This Settlement Agreement and Release (the "Settlement Agreement") is
entered into between Tyco Group S.A.R.L. (hereinafter referred to as "Tyco"), a
Luxembourg corporation, and Xxxxxx & Xxxxx Corporation (hereinafter referred to
as "Xxxxxx & Xxxxx"), a Tennessee corporation. Tyco and Xxxxxx & Xxxxx are
herein sometimes referred to individually as a "party" and collectively as the
"parties".
WHEREAS:
A. Tyco and Xxxxxx & Xxxxx entered into a Purchase Agreement dated May 7,
2000, as amended as of July 2, 2000, and as of October 27, 2000 (hereinafter, as
amended, the "Purchase Agreement"). Defined terms used herein but not otherwise
defined herein shall have the meanings specified therefor in the Purchase
Agreement;
B. The Purchase Agreement provided, under Sections 2.08 and 2.09, for the
preparation of a Closing Statement, the calculation of Closing Working Capital
and Closing Long-Term Tangible Assets and for an adjustment to the Purchase
Price relating to such calculations;
C. The Purchase Agreement provided for a "Holdback Amount" of $50,000,000,
which amount was reduced to $35,000,000 after the consummation of the Hungary
Closing and the Mexico Closing in accordance with the terms of the Purchase
Agreement;
D. The Purchase Agreement provided, under Section 9.02(a), for the
reimbursement by Xxxxxx & Xxxxx of Tyco for certain liabilities and obligations
in connection with unfunded pension liabilities, the amount of reimbursement to
be determined pursuant to Section 9.02(a) of the Purchase Agreement. The
aggregate amount of the Pre-Closing Acquired Subsidiary Plan Obligations with
respect to all Acquired Subsidiary Retirement Plans is herein referred to as the
"Pension Liabilities";
E. Disputes have arisen between Tyco and Xxxxxx & Xxxxx in connection with
the calculation and preparation of the Closing Statement and the Pension
Liabilities;
F. The Parties now desire amicably to resolve those disputes as set forth
herein,
NOW THEREFORE, for and in consideration of the mutual promises and
understandings hereinafter set forth, Tyco, on the one hand, and Xxxxxx & Xxxxx
on the other, agree as follows:
1. Tyco shall retain the $35 million Holdback Amount in its entirety, and
Xxxxxx & Xxxxx shall relinquish any and all claims to such amount, any portion
thereof or any interest thereon.
2. Tyco has paid in full the Purchase Price as defined in the Purchase
Agreement.
3. Within three (3) business days after full execution of this Settlement
Agreement by Tyco and Xxxxxx & Xxxxx, Xxxxxx & Xxxxx shall pay to Tyco the
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sum of $4.4 million in immediately available funds in full settlement of the
Pension Liabilities and interest thereon under Section 9.02(a) of the Purchase
Agreement. Upon such payment by Xxxxxx & Xxxxx to Tyco, Tyco shall relinquish
any and all rights and claims to reimbursement, payment or compensation in any
form with respect to the Pension Liabilities (and, for the avoidance of doubt,
otherwise with respect to any underfunding of any defined benefit plans
maintained by any Acquired Subsidiary), including any portion thereof or any
interest thereon.
4. In consideration of the other agreements contained herein, Xxxxxx &
Xxxxx and Tyco agree that Xxxxxx & Xxxxx shall not be liable for any Loss (as
such term is defined in Section 8.06(a) of the Purchase Agreement) under the
Purchase Agreement with respect to any country set forth on Schedule A (each
such country, a "Designated Country") unless the aggregate amount of Losses
(after giving effect to any Tax Benefits) with respect to such Designated
Country exceeds the amount set forth opposite such Designated Country on
Schedule A (such amount with respect to a Designated Country, the "Tax
Deductible"), and then only to the extent that the aggregate amount of Losses
(after giving effect to any Tax Benefits) with respect to such Designated
Country exceeds the applicable Tax Deductible; provided that:
(a) with regard to any Losses with respect to any Designated Country
(i) for which Tyco has made a cash payment prior to the date of this
Settlement Agreement, and (ii) which do not, in the aggregate, exceed
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the applicable Tax Deductible for such Designated Country ("Prior Paid
Losses"), Tyco shall be deemed to have complied with, and Xxxxxx & Xxxxx
waives compliance with, the provisions of Sections 8.06(c) and (d) and
8.07 of the Purchase Agreement with respect to indemnification for such
Prior Paid Losses if Tyco provides to Xxxxxx & Xxxxx evidence of such cash
payment and reasonable documentation from the relevant tax authority (to
the extent available) requesting such payment (including, by way of
example, tax invoices and tax returns); and
(b) to the extent that the aggregate amount of Losses (including,
without limitation, Prior Paid Losses) with respect to a Designated
Country exceed the applicable Tax Deductible for such Designated Country,
all Losses in excess of the applicable Tax Deductible shall be subject to
the provisions of Section 8.06 of the Purchase Agreement (including,
without limitation, the provisions of Sections 8.06(c) and (d) thereof).
The agreement between the parties set forth in this section is herein referred
to as the "Section 8.06 Amendment".
5. Each party (including its present and former parents, divisions,
affiliates, subsidiaries, officers, directors, employees and agents and its and
their respective predecessors, successors and assigns) agrees (a) to mutually
release the other party (including its present and former parents, divisions,
affiliates, subsidiaries, officers, directors, employees and agents and its and
their respective
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predecessors, successors and assigns) from any and all claims and causes of
action of any and every kind and character, known and unknown, which ever
existed, now exist or may hereafter exist based upon, arising out of or relating
to the preparation of the Closing Statement pursuant to Section 2.08 of the
Purchase Agreement, the Purchase Price Adjustment pursuant to Section 2.09 of
the Purchase Agreement, the full payment by Tyco of the Purchase Price, and the
Pension Liabilities and any portion thereof or any interest thereon (hereinafter
collectively referred to as the "Releases"), and (b) that the Purchase Agreement
shall be deemed amended to give effect to the Section 8.06 Amendment.
6. Subject to the Releases given in paragraph 5 and the Section 8.06
Amendment, the Purchase Agreement shall remain in full force and effect between
the parties in accordance with its terms. After the date hereof, references to
the Purchase Agreement shall be deemed references to the Purchase Agreement as
amended and modified by this Settlement Agreement.
7. Each of the parties hereto represents and warrants to the other party
that the party has not heretofore assigned, transferred, encumbered or purported
to assign, transfer or encumber any claim, right or other matter released under
this Settlement Agreement.
8. Each of the parties hereto represents and warrants to the other party
that each party has obtained and has the requisite legal authority to enter into
this Settlement Agreement, that the person signing this Settlement Agreement on
the party's behalf has the requisite legal authority to sign on behalf of said
party and
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to bind said party to the obligations imposed by and under this Settlement
Agreement. Further, each of the persons signing this Settlement Agreement on a
party's behalf represents and warrants that the person has the requisite legal
authority to sign this Settlement Agreement on the party's behalf.
9. This Settlement Agreement shall be binding upon and shall inure to the
benefit of each of the parties' respective successors and assigns. The parties
do not intend that there be any third-party beneficiary of this Settlement
Agreement.
10. This Settlement Agreement is the entire, complete and integrated
agreement made this day by the parties hereto. This Settlement Agreement is not
subject to any conditions not expressly provided for herein, and there are no
prior or contemporaneous written or oral agreements by the parties which can in
any way modify, alter, waive or estop their express terms. This Settlement
Agreement may not be modified, altered, amended, waived or changed in any way,
except in writing signed by the parties.
11. This Settlement Agreement is the product of negotiation and
preparation by Tyco, on the one hand, and Xxxxxx & Xxxxx, on the other, and
their respective attorneys. This Settlement Agreement shall not be construed for
or against any party.
12. Each party has been represented by counsel of its own selection, has
reviewed this Settlement Agreement with its counsel, has had the terms of this
Settlement Agreement explained by counsel, and understands the contents and
effect of this Settlement Agreement. Each party enters into this Settlement
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Agreement wholly upon each party's own respective judgments, beliefs and
knowledge of the matters set forth herein and on the advice of each party's own
respective attorneys.
13. This Settlement Agreement may be executed in counterparts, all of
which taken together shall constitute one original.
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The UNDERSIGNED have read and acknowledge the foregoing Settlement
Agreement and agree to its terms.
Dated: February 21, 2002 TYCO GROUP S.A.R.L.
By /s/ XXXXX O'XXXXX XXXXX
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Xxxxx O'Xxxxx Xxxxx
General Manager
Dated: February 21, 2002 XXXXXX & XXXXX CORPORATION
By /s/ XXXXXX X. XXXXXX XX.
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Xxxxxx X. Xxxxxx Xx.
V.P. -- Tax
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Schedule A
Country Tax Deductible
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(in US $ thousands)
Xxxxxxx 000
Xxxxxx 00
Xxxx Xxxx 0
Xxxxxxx 00
Xxxxx 8
Japan 983
Luxembourg 590
Malaysia 2
Singapore 94
Xxxxxx 0
Xxxxxxxxxxx 1225
U.K. 566
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