Exhibit 2.1
Form of Agreement
DISTRIBUTION AGREEMENT
dated as of [ ], 1997
by and between
XXXXXX INTERNATIONAL, INC.,
an Indiana corporation
(to be renamed "[ ]")
and
NEW XXXXXX INTERNATIONAL, INC.,
an Indiana corporation
(to be renamed "XXXXXX INTERNATIONAL, INC.")
TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS
Section 1.01 General........................................................ 2
Section 1.02 Exhibits, Etc..................................................11
ARTICLE II
CERTAIN TRANSACTIONS PRIOR TO THE DISTRIBUTION DATE
Section 2.01 Financing......................................................12
Section 2.02 Transfer of New Xxxxxx Assets..................................16
Section 2.03 Transfers Not Effected Prior to
the Distribution; Transfers Deemed
Effective as of the Distribution Date.........................16
Section 2.04 No Representations or Warranties;
Consents....................................................16
Section 2.05 Assumption and Satisfaction of New
Xxxxxx Liabilities; Retention of
Safety Liabilities.............................................17
Section 2.06 Financial Representations and Warranties.......................17
Section 2.07 Conveyancing and Assumption Instruments........................18
Section 2.08 Certificate of Incorporation; By-laws;
Share Purchase Rights Plan..................................18
Section 2.09 New Xxxxxx Capitalization......................................18
Section 2.10 Certain Pre-Distribution Transactions..........................18
ARTICLE III
THE DISTRIBUTION
Section 3.01 Cooperation Prior to the Distribution..........................19
Section 3.02 Company Board Action; Distribution
Procedures...................................................20
Section 3.03 Conditions Precedent to the
Distribution.................................................20
Section 3.04 The Distribution.............................................22
ARTICLE IV
SERVICES
Section 4.01 Provision of Management Services.............................. 22
Section 4.02 Fee for Services; Expenses.....................................23
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Section 4.03 Independent Contractor Status..................................23
Section 4.04 Disclaimer; Limited Liability..................................23
ARTICLE V
INDEMNIFICATION
Section 5.01 Indemnification by Safety......................................24
Section 5.02 Indemnification by New Xxxxxx..................................25
Section 5.03 Limitations on Indemnification
Obligations..................................................25
Section 5.04 Procedure for Indemnification..................................26
Section 5.05 Remedies Cumulative............................................29
Section 5.06 Survival of Indemnities........................................29
Section 5.07 Right of Inquiry...............................................30
ARTICLE VI
CERTAIN ADDITIONAL MATTERS AND COVENANTS
Section 6.01 The New Xxxxxx Board...........................................31
Section 6.02 Resignations; Safety Board.....................................31
Section 6.03 Certain Post-Distribution Transactions.........................32
Section 6.04 Use of Names...................................................33
Section 6.05 Restrictions on Hiring of Other Party's
Employees.....................................................34
Section 6.06 Further Assurances; Cooperation................................34
Section 6.07 Guarantees.....................................................34
Section 6.08 Shared Facilities..............................................35
Section 6.09 Thiokol-Xxxxxx Spinoff.........................................36
Section 6.10 Non-Competition................................................36
ARTICLE VII
ACCESS TO INFORMATION AND SERVICES
Section 7.01 Provision of Corporate Records.................................37
Section 7.02 Access to Information..........................................38
Section 7.03 Production of Witnesses........................................40
Section 7.04 Reimbursement..................................................41
Section 7.05 Retention of Records...........................................41
Section 7.06 Confidentiality................................................41
ARTICLE VIII
INSURANCE
Section 8.01 Policies and Rights............................................42
Section 8.02 Post-Distribution Date Claims..................................42
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Section 8.03 Administration and Reserves....................................43
Section 8.04 Agreement for Waiver of Conflict and
Shared Defense.............................................44
Section 8.05 Cooperation with Respect
to Insurance...............................................44
ARTICLE IX
MISCELLANEOUS
Section 9.01 Complete Agreement; Construction...............................45
Section 9.02 Survival of Agreements.........................................45
Section 9.03 Expenses ...................................................45
Section 9.04 Governing Law..................................................45
Section 9.05 Notices ...................................................46
Section 9.06 Amendments ...................................................46
Section 9.07 Successors and Assigns.........................................47
Section 9.08 Counterparts.................................................. 47
Section 9.09 Subsidiaries...................................................47
Section 9.10 Third Party Beneficiaries......................................47
Section 9.11 Titles and Headings............................................47
Section 9.12 Exhibits and Schedules.........................................47
Section 9.13 Legal Enforceability...........................................47
Section 9.14 Consent to Jurisdiction .......................................48
Schedules and Exhibits
Schedule 1.01(a) Safety Business, Retained Subsidiary
and Other Safety Interests and Investments
Schedule 1.01(b) Safety Liabilities
Schedule 1.01(c)(1) Company Policies
Schedule 1.01(c)(2) New Xxxxxx Policies
Schedule 1.01(c)(3) Safety Policies
Schedule 1.01(d)(1) New Xxxxxx Real Property
Schedule 1.01(d)(2) Safety Real Property
Schedule 1.01(e) New Xxxxxx Businesses, New Xxxxxx
Subsidiaries and Other New Xxxxxx
Interests and Investments
Schedule 1.01(f) New Xxxxxx Liabilities
Schedule 1.01(g)(1) New Xxxxxx Intellectual Property
Schedule 1.01(g)(2) Safety Intellectual Property
Schedule 4.02 Rates for Services - Formula Format
Schedule 6.08 Terms of Rochester Hills Shared Usage
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Exhibit A Form of Employee Benefits Allocation
Agreement
Exhibit B New Xxxxxx By-Laws (to be provided
prior to signing)
Exhibit C New Xxxxxx Articles of Incorporation
(to be provided prior to signing)
Exhibit D Form of Tax Sharing Agreement
Exhibit E Form of New Xxxxxx Share Purchase
Rights Plan (to be provided prior to
signing)
Exhibit F Records Retention Policy
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DISTRIBUTION AGREEMENT
DISTRIBUTION AGREEMENT (this "Agreement"), dated as of [________],
1997, by and between XXXXXX INTERNATIONAL, INC., an Indiana corporation (the
"Company") and NEW XXXXXX INTERNATIONAL, INC., an Indiana corporation and a
wholly owned subsidiary of the Company ("New Xxxxxx").
WHEREAS, the Board of Directors of the Company has determined it is
appropriate and desirable to separate the Company and its subsidiaries into two
companies by consolidating its Specialty Chemicals and Salt businesses in New
Xxxxxx and distributing to the holders of shares of common stock, $1 par value
per share, of the Company ("Company Common Stock"), all outstanding shares of
common stock $1 par value per share, of New Xxxxxx ("New Xxxxxx Common Stock"),
together with the associated preferred share purchase rights ("New Xxxxxx
Rights");
WHEREAS, the Board of Directors of the Company has determined it is
appropriate and desirable to enter into the Combination Agreement, dated as of
November 25, 1996 (the "Combination Agreement"), by and among the Company,
Autoliv AB, a corporation organized under the laws of the Kingdom of Sweden
("Autoliv"), Autoliv, Inc., a Delaware corporation ("Newco"), and ASP Merger Sub
Inc., a Delaware corporation and a wholly owned subsidiary of Newco ("Newco
Sub"), pursuant to which, among other things, Newco Sub will be merged with and
into the Company (the "Merger") and Newco will offer to acquire all of the
outstanding capital stock of Autoliv pursuant to the Exchange Offer (as defined
in the Combination Agreement, and, together with the other transactions
contemplated thereby, the "Transactions");
WHEREAS, immediately prior to the Effective Time (as defined in
Section 1.2 of the Combination Agreement) of the Merger, the Company's Board of
Directors (the "Company Board"), subject to the approval of the Company's
stockholders and the other conditions set forth in Section 3.03 of this
Agreement, expects to distribute to the holders of Company Common Stock, other
than shares held in the treasury of the Company, on a pro rata basis, all of the
issued and outstanding shares of New Xxxxxx Common Stock (the "Distribution");
WHEREAS, immediately prior to the Distribution, the Company Board,
subject to the approval of the Company's stockholders and the other conditions
set forth in Section 3.03 of this Agreement, expects to cause (i) the Company to
contribute the New Xxxxxx Assets (as defined below) to New Xxxxxx or another
wholly-owned subsidiary of the Company as a capital
contribution or in exchange for shares of such subsidiary's stock, (ii) the
Company to contribute to New Xxxxxx the New Xxxxxx Capital Contribution (as
defined herein), the Safety Supplemental Distribution (as defined herein) as
well as the stock of the New Xxxxxx Subsidiaries (as defined herein) and certain
other assets to New Xxxxxx as a capital contribution and (iii) New Xxxxxx to
assume the New Xxxxxx Liabilities (as defined below), all as more specifically
provided herein (the transactions described in clauses (i), (ii) and (iii) are
referred to collectively as the "Contribution");
WHEREAS, the purpose of the Distribution is to make possible the
Merger by divesting the Company of the businesses and operations to be conducted
by New Xxxxxx and its subsidiaries, which Newco and Autoliv have required as a
condition to their willingness to consummate the Transactions;
WHEREAS, it is the intention of the parties to this Agreement that the
Contribution and the Distribution will qualify as transactions described in
Sections 351 and Section 355 of the Internal Revenue Code of 1986, as amended
(the "Code") and/or a "reorganization" within the meaning of Section
368(a)(1)(D) of the Code; and
WHEREAS, this Agreement sets forth or provides for certain agreements
by and among the Company and New Xxxxxx in consideration of the separation of
the ownership of the Company and New Xxxxxx.
NOW, THEREFORE, in consideration of the mutual agreements, provisions
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: any action, suit, arbitration, inquiry, proceeding or
investigation by or before any court, any governmental or other regulatory or
administrative agency or commission or any arbitration tribunal.
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Affiliate: as defined in Rule 12b-2 promulgated by the Commission
under the Exchange Act, as such Regulation is in effect on the date hereof.
Agent: the distribution agent appointed by the Company to distribute
shares of New Xxxxxx Common Stock pursuant to the Distribution.
Ancillary Agreements: all of the written agreements, instruments,
understandings, assignments or other arrangements entered into in connection
with the Transactions contemplated hereby, including, without limitation, the
Combination Agreement, the Conveyancing and Assumption Instruments, the Benefits
Agreement, the Safety Credit Agreement and the Tax Sharing Agreement.
Assets: any and all assets, properties and rights, whether tangible or
intangible, whether real, personal or mixed, whether fixed, contingent or
otherwise, and wherever located, including, without limitation, the following:
(a) real property interests (including leases), land, plants,
buildings and improvements;
(b) machinery, equipment, tooling, vehicles, furniture and fixtures,
leasehold improvements, repair parts, tools, plant, laboratory and office
equipment and other tangible personal property, together with any rights or
claims arising out of the breach of any express or implied warranty by the
manufacturers or sellers of any of such assets or any component part
thereof;
(c) inventories, including raw materials, work-in-process, finished
goods, parts, accessories and supplies;
(d) cash, bank accounts, notes, loans and accounts receivable (whether
current or not current), interests as beneficiary under letters of credit,
advances and performance and surety bonds;
(e) 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,
pre-organization certificates or subscriptions, transferable shares,
investment contracts, voting-trust certificates, interests in partnerships
and other entities (including joint ventures), puts, calls, straddles,
options, swaps, collars, caps and other securities or hedging arrangements
of any kind;
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(f) financial, accounting and operating data and records including,
without limitation, books, records, notes, sales and sales promotional
data, advertising materials, credit information, cost and pricing
information, customer and supplier lists, reference catalogs, payroll and
personnel records, minute books, stock ledgers, stock transfer records and
other similar property, rights and information;
(g) patents, patent applications, trademarks, trademark applications
and registrations, trade names, service marks, service names, copyrights
and copyright applications and registrations, commercial and technical
information including engineering, production and other designs, drawings,
specifications, formulae, technology, computer and electronic data
processing programs and software, inventions, processes, trade secrets,
know-how, confidential information and other proprietary property, rights
and interests;
(h) agreements, leases, contracts, sale orders, purchase orders, open
bids and other commitments and all rights therein;
(i) prepaid expenses, deposits and retentions held by third parties;
(j) claims, causes of action, choses in action, rights under insurance
policies, rights under express or implied warranties, rights of recovery,
rights of set-off, rights of subrogation and all other rights of any kind;
(k) licenses, franchises, permits, authorizations and approvals; and
(l) goodwill and going concern value.
Benefits Agreement: the Employee Benefits Allocation Agreement, dated
as of the date of this Agreement, between the Company and New Xxxxxx, the form
of which is attached hereto as Exhibit A.
Claims Administration: 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.
Code: the Internal Revenue Code of 1986, as amended, or any successor
legislation.
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Commission: the Securities and Exchange Commission.
Company Policies: all Policies, current or past, which are owned or
maintained by or on behalf of the Company or any of its predecessors which
relate to both the Safety Business and the New Xxxxxx Businesses, including
without limitation the Policies identified on Schedule 1.01(c)(1).
Conveyancing and Assumption Instruments: collectively, the various
agreements, instruments and other documents to be entered into to effect the
transfer of assets and the assumption of Liabilities in the manner contemplated
by this Agreement and the Ancillary Agreements.
Corporate Assets: the Assets of the Company relating to the Corporate
Operations.
Corporate Operations: the activities and operations of the Company's
corporate administrative group and the senior executive management of the
Company, which activities and operations do not primarily relate to or primarily
arise from the Safety Business.
Distribution Date: the date determined by the Company Board as of
which the Distribution shall be effected, which is presently contemplated to be
March 31, 1997.
Distribution Record Date: the date to be determined by the Company
Board as the record date for the Distribution.
Exchange Act: the Securities Exchange Act of 1934, as amended.
Foreign Exchange Rate: with respect to any currency other than United
States dollars as of any date of determination, the average of the opening bid
and asked rates on such date at which such currency may be exchanged for United
States dollars as quoted by Bank of America Illinois except that, with respect
to any Indemnifiable Loss (as defined in Section 5.01) covered by insurance, the
Foreign Exchange Rate for such currency shall be as set forth in Section
5.03(b)(ii).
Form S-4: The registration statement on Form S-4 to be filed by New
Xxxxxx with the Commission to effect the registration of the New Xxxxxx Common
Stock and the New Xxxxxx Rights pursuant to the Securities Act.
Insurance Administration: with respect to each Policy, the accounting
for premiums, retrospectively-rated premiums, defense costs, indemnity payments,
deductibles and
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retentions as appropriate under the terms and conditions of each of the
Policies; and the reporting to excess insurance carriers of any losses or claims
which may cause the per-occurrence or aggregate limits of any policy to be
exceeded, and the distribution of Insurance Proceeds as contemplated by this
Agreement.
Insurance Proceeds: those monies (a) received by an insured from an
insurance carrier or (b) paid by an insurance carrier on behalf of the insured,
in either case net of any applicable premium adjustment, co-insurance,
retrospectively-rated premium, deductible, retention, cost or reserve paid or
held by or for the benefit of such insured.
Insured Claims: those Liabilities that, individually or in the
aggregate, are covered within the terms and conditions of any of the Policies,
whether or not subject to deductibles, co-insurance, uncollectability or
retrospectively-rated premium adjustments, but only to the extent that such
Liabilities are within applicable Policy limits, including aggregates.
IRS: the Internal Revenue Service.
Liabilities: any and all debts, liabilities, commitments and
obligations, absolute or contingent, matured or unmatured, liquidated or
unliquidated, accrued or unaccrued, known or unknown, whenever arising,
including all costs and expenses relating thereto, and including, without
limitation, those debts, liabilities and obligations arising under any law,
rule, regulation, Action, threatened Action, order or consent decree of any
governmental entity or any award of any arbitrator of any kind, and those
arising under any contract, commitment or undertaking.
New Xxxxxx Assets: collectively, all of the rights and Assets of the
Company and its subsidiaries other than the Safety Assets, including without
limitation: (a) the assets included on the consolidated balance sheet of New
Xxxxxx as of June 30, 1996 and any assets acquired by the Company or New Xxxxxx
other than Safety Assets from July 1, 1996 to the Distribution Date (other than,
in each case, assets sold or otherwise disposed of on or prior to the
Distribution Date); (b) the real property, owned or leased, listed on Schedule
1.01(d)(1); (c) any recoveries under the liabilities listed on Schedule 1.01(f)
or the litigation not included in the Safety Liabilities; (d) subject to Section
6.04 hereof, the patents, trademarks, trade names, copyrights (including
applications for any of the foregoing), and invention records of the Company
other than the Safety Assets, including without limitation the patents,
trademarks and copyrights listed on Schedule 1.01(g)(1);
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(e) the Company's books and records to the extent set forth in Section 7.01(a);
(f) all of the outstanding capital stock or other interests of the Company in
the New Xxxxxx Subsidiaries and in the partnerships, joint ventures and
investments listed on Schedule 1.01(e); (g) the New Xxxxxx Capital Contribution,
the Safety Supplemental Distribution and all domestic and foreign cash bank
balances and short-term investments other than (i) cash generated from the
operations of the Safety Business from July 1, 1996 through the Distribution
Date in excess of the sum of (x) the cash used by the Safety Business from July
1, 1996 through the Distribution Date, (y) the Safety Supplemental Distribution
and (z) $15 million of expenses incurred by the Company in connection with the
transactions contemplated by the Combination Agreement and (ii) xxxxx checking
and cash accounts with respect to the Safety Business not maintained, in the
ordinary course of business, on the central company cash management system,
including without limitation to the extent set forth in Section 2.01(f) of this
Agreement; (h) the New Xxxxxx Policies and the rights under the Company Policies
to the extent set forth in Article VIII of this Agreement; and (i) the Company's
rights under Sections 8.3(b), 8.6, 8.13(c) and 8.22 of the Combination Agreement
that survive the Effective Time (as defined in the Combination Agreement), and
New Xxxxxx'x rights and Assets under the other Ancillary Agreements.
New Xxxxxx Board: the Board of Directors of New Xxxxxx.
New Xxxxxx Businesses: all assets, businesses and operations of the
Company other than those included in the Safety Business, including without
limitation the New Xxxxxx Assets and the businesses and operations of the
Adhesives & Chemical Specialties Group, the Coatings Group, the Electronic
Materials Group, the Salt Group and the Corporate Operations, as heretofore,
currently or hereafter conducted, including without limitation the businesses
listed on Schedule 1.01(e) and all assets, businesses or operations managed or
operated by, or otherwise operationally related to, any of such businesses,
which have been sold or otherwise disposed of or discontinued prior to the
Distribution Date but which shall not include the Safety Business.
New Xxxxxx By-Laws: the By-Laws of New Xxxxxx, substantially in the
form of Exhibit B, to be in effect on the Distribution Date.
New Xxxxxx Capital Contribution: the capital contribution or repayment
in cash of intercompany indebtedness (including as provided in Section 2.10(b)
of this Agreement) in
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the aggregate amount of $750,000,000 to be contributed by the Company to New
Xxxxxx on or immediately prior to the Distribution Date.
New Xxxxxx Charter: the Articles of Incorporation of New Xxxxxx,
substantially in the form of Exhibit C, to be in effect on the Distribution
Date.
New Xxxxxx Employee: any individual who, on or prior to the
Distribution Date, was employed by the Company or any of its subsidiaries and
who, on or after the Distribution Date, or otherwise in connection with the
Distribution, is intended by the parties hereto to be employed by New Xxxxxx or
a New Xxxxxx Subsidiary or in a New Xxxxxx Business on an on-going basis.
New Xxxxxx Liabilities: collectively, all of the Liabilities of the
Company and its subsidiaries incurred on or prior to the Distribution Date
(other than Safety Liabilities) including without limitation: all of (i) the
Liabilities of New Xxxxxx under this Agreement or any of the Ancillary
Agreements, (ii) the Liabilities arising out of or relating to any of the New
Xxxxxx Businesses or the New Xxxxxx Assets and (iii) the Liabilities specified
on Schedule 1.01(f).
New Xxxxxx Policies: all Policies, current or past, which are owned or
maintained by or on behalf of the Company or any of its predecessors which
relate to the New Xxxxxx Businesses but do not relate to the Safety Business,
including without limitation the Policies identified on Schedule 1.01(c)(2).
New Xxxxxx Subsidiaries: all of the subsidiaries of the Company other
than the Retained Subsidiaries, including without limitation those listed on
Schedule 1.01(e), and any other subsidiary of New Xxxxxx which hereafter may be
organized or acquired, all of which subsidiaries will become subsidiaries of New
Xxxxxx.
NYSE: New York Stock Exchange, Inc.
Policies: insurance policies and insurance contracts of any kind,
including without limitation primary and excess policies, comprehensive general
liability policies, automobile, aircraft and workers' compensation insurance
policies, life insurance and other employee benefit insurance policies, and
self-insurance and captive insurance company arrangements, together with the
rights, benefits and privileges thereunder.
Proxy Statement: the proxy statement/prospectus/offer to purchase to
be sent to the holders of shares of
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Company Common Stock in connection with the Special Meeting and to the holders
of Autoliv common stock in connection with the Exchange Offer.
Retained Subsidiaries: the subsidiaries of the Company listed on
Schedule 1.01(a).
Rights Agreement: the Rights Agreement, dated as of [ ], by and
between New Xxxxxx and The First National Bank of Chicago, as Rights Agent,
substantially in the form of Exhibit E hereto.
Ruling Request: the private letter ruling request to be filed by the
Company with the IRS, as supplemented and amended from time to time, with
respect to certain tax aspects of the Distribution and the Merger.
Safety: [Name to come], the surviving corporation of the Merger (as
defined in the Combination Agreement), which shall occur pursuant to the
Combination Agreement immediately subsequent to the Distribution.
Safety Assets: collectively, the following rights and Assets of the
Company and its subsidiaries: (a) the assets included on the consolidated
balance sheet of the Safety Business as of June 30, 1996 and any assets acquired
by the Company exclusively relating to the Safety Business from July 1, 1996 to
the Distribution Date (other than, in each case, assets sold or otherwise
disposed of on or prior to the Distribution Date); (b) the real property owned
or leased listed on Schedule 1.01(d)(2); (c) any recoveries under the litigation
listed on Schedule 1.01(b); (d) other than with respect to the "Xxxxxx" and
"Xxxxxx International" names and related trademarks and trade names (but subject
to Section 6.04 hereof), the patents, trademarks, trade names, copyrights
(including applications for any of the foregoing), and invention records of the
Company relating primarily to the Safety Business, including without limitation
the patents, trademarks and copyrights listed on Schedule 1.01(g)(2); (e) the
Company's books and records to the extent set forth in Section 7.01(b); (f) all
of the outstanding capital stock or other interests of the Company in the
Retained Subsidiaries and in the partnerships, joint ventures and investments
listed on Schedule 1.01(a); (g) xxxxx checking and cash accounts with respect to
the Safety Business not maintained, in the ordinary course of business, on the
central company cash management system; (h) cash generated from the operations
of the Safety Business from July 1, 1996 through the Distribution Date in excess
of the sum of (x) cash used by the Safety Business, (y) the Safety Supplemental
Distribution and
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(z) $15 million of expenses incurred by the Company in connection with the
transactions contemplated by the Combination Agreement; (i) the Safety Policies
and the rights under the Company Policies to the extent set forth in Article
VIII of this Agreement; (j) the rights and Assets of Safety under the Ancillary
Agreements; and (k) any other rights and Assets of the Company and its
subsidiaries exclusively relating to the Safety Business, provided that the
Safety Assets shall not include (1) cash and cash equivalents, except as set
forth in clause (g) or (h) above, and (2) assets associated with the Corporate
Operations.
Safety Business: the Safety Assets and the assets, business and
operations of the Company's Automotive Safety Products Group, as heretofore,
currently or hereafter conducted, including without limitation the businesses
listed on Schedule 1.01(a) and all businesses or operations predominantly
managed or operated by, or otherwise operationally related to, the Company's
Automotive Safety Products Group which have been sold or otherwise disposed of
or discontinued prior to the Distribution Date but shall not include any of the
New Xxxxxx Businesses.
Safety Credit Agreement: the credit agreement or other financing
agreements or arrangements to be entered into by the Company prior to the
Distribution Date to provide Safety with working capital, to fund the New Xxxxxx
Capital Contribution and, if necessary, to repay certain intercompany
indebtedness pursuant to Section 2.10(b) hereof.
Safety Employee: any individual who, on or prior to the Distribution
Date, was employed by the Company or any of its subsidiaries and who, on or
after the Distribution Date, or otherwise in connection with the Distribution,
is intended by the parties hereto to be employed by Safety or a Safety
subsidiary or parent company or in the Safety Business (including the business
of Newco and its subsidiaries) on an on-going basis.
Safety Liabilities: collectively, all of (i) the Liabilities assigned
to or assumed by the Company under this Agreement or any of the Ancillary
Agreements, except as otherwise expressly provided herein or therein; (ii) all
of the Liabilities (or portion thereof) relating exclusively to or arising
exclusively from the Safety Business or the Safety Assets; (iii) the Liabilities
listed on Schedule 1.01(b); (iv) Liabilities on the balance sheet of the Safety
Business as of June 30, 1996 (or reflected in the notes thereto), and
Liabilities incurred by the Safety Business on or after July 1, 1996, excluding,
in each case, Liabilities paid or otherwise
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satisfied on or prior to the Distribution Date; and (v) the liabilities of the
Company under the Safety Credit Agreement.
Safety Policies: all Policies, current or past, which are owned or
maintained by or on behalf of the Company or any of its predecessors which
relate to the Safety Business but do not relate to the New Xxxxxx Businesses,
including without limitation the Policies identified on Schedule 1.01(c)(3).
Safety Supplemental Distribution: an amount in cash equal to
$50,000,000 (subject to adjustment pursuant to Sections 2.01(a) and 2.10(a))
plus, if the Distribution Date occurs after March 31, 1997, an additional amount
in cash equal to the product of $7,200,000 times the number of months (or
fraction thereof) between March 31, 1997 and the Distribution Date, such amounts
to be contributed by the Company to New Xxxxxx on or prior to the Distribution
Date.
Securities Act: the Securities Act of 1933, as amended.
Special Meeting: the Special Meeting of Stockholders of the Company to
consider the Distribution, the Merger and certain related matters.
Special Meeting Record Date: the record date for stockholders of the
Company entitled to vote at the Special Meeting.
Subsidiaries: the term "subsidiaries" as used herein with respect to
any entity shall, unless otherwise indicated, be deemed to refer to both direct
and indirect subsidiaries of such entity and any other entity at least 45% of
the stock or other voting interests of which are owned by such entity.
Tax Sharing Agreement: the Tax Sharing Agreement, dated as of the date
hereof, between New Xxxxxx and the Company, the form of which is attached hereto
as Exhibit D.
Section 1.02 Exhibits, Etc. References to an "Exhibit" or to a
"Schedule" are, unless otherwise specified, to one of the Exhibits or Schedules
attached to this Agreement, and references to a "Section" are, unless otherwise
specified, to one of the Sections of this Agreement.
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ARTICLE II
CERTAIN TRANSACTIONS PRIOR TO THE DISTRIBUTION DATE
Section 2.01 Financing.
(a) Safety Credit Agreement; New Xxxxxx Capital Contribution; Safety
Supplemental Distribution. On or immediately prior to the Distribution Date, the
Company shall enter into the Safety Credit Agreement, on terms reasonably
acceptable to Autoliv and the Company, and shall contribute the New Xxxxxx
Capital Contribution to New Xxxxxx. New Xxxxxx shall have no obligations or
Liabilities with respect to the Safety Credit Agreement. On or prior to the
Distribution Date, the Company shall contribute the Safety Supplemental
Distribution to New Xxxxxx to the extent not previously paid under Section
2.01(c) of this Agreement; provided that if the estimated retained earnings
(exclusive of any costs and expenses to be paid by Safety pursuant to Section
9.03 of this Agreement relating to the transactions contemplated by this
Agreement and the Combination Agreement and prior to giving effect to the Safety
Supplemental Distribution) of the Safety Business from July 1, 1996 through the
Distribution Date (or through the most recent date prior to the Distribution
Date for which such estimate can reasonably be made), based solely upon the
Company's accounting principles, practices, policies and procedures consistently
applied, as set forth in a certificate of the Chief Financial Officer of the
Company dated the Distribution Date (the "CFO Certificate"), are less than the
amount of the Safety Supplemental Distribution as otherwise determined, the
amount of the Safety Supplemental Distribution shall be adjusted (without
interest) to equal such lesser amount as set forth in such certificate. The CFO
Certificate shall be prepared in good faith, shall be final and binding upon the
parties, and each party hereby waives and releases any claim or remedy it might
otherwise have with respect thereto.
(b) Credit Sensitive Debentures. Prior to the Distribution Date, New
Xxxxxx shall enter into a supplemental indenture or other instrument to the
extent required by the indenture pursuant to which the Company's Credit
Sensitive Debentures due June 1, 2020 have been issued, which supplemental
indenture or instrument will provide that, as of the Distribution Date and
pursuant to Sections 801 and 802 of such indenture, the obligations of the
Company thereunder shall become obligations of New Xxxxxx, and the Company shall
have no remaining obligations thereunder.
(c) Operation of the Safety Business Prior to the Distribution Date.
The Company and New Xxxxxx shall, to the
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fullest extent reasonably practicable, treat, solely for the purposes of this
Agreement, the Safety Business as if it were a stand-alone, self-financed entity
from July 1, 1996 through the Distribution Date. Accordingly, for the period
from July 1, 1996 through the Distribution Date (i) the Safety Business shall be
treated as retaining all cash generated from the operations of the Safety
Business in excess of the sum of (x) the cash used by the Safety Business, (y)
the Safety Supplemental Distribution, which shall be deemed to be made on the
last day of each month on a prorated basis and (z) $15 million of expenses
incurred by the Company in connection with the transactions contemplated by the
Combination Agreement, which shall be the responsibility of the Safety Business,
to the extent not theretofore charged to the Safety Business; (ii) the Safety
Business shall be credited with interest on its positive cash balances and
charged for interest on any negative cash balances funded by the New Xxxxxx
Businesses at a per annum interest rate equal to the average interest rate
earned on the Company's cash balances during such period, with any intercompany
borrowings to fund the operations of the Safety Business in excess of the amount
reflected on the audited balance sheet of the Safety Business as of June 30,
1996 treated as a payable to New Xxxxxx from the Company; (iii) any payments by
the Safety Business in connection with the New Xxxxxx Businesses or the New
Xxxxxx Employees (including, without limitation, any such payments in respect of
New Xxxxxx Liabilities) shall be treated as a payable to the Safety Business
from New Xxxxxx, and any payments by the New Xxxxxx Businesses in connection
with the Safety Business or the Safety Employees (including, without limitation,
any such payments in respect of Safety Liabilities) shall be treated as a
payable to New Xxxxxx from the Safety Business; (iv) the Safety Business and the
New Xxxxxx Businesses shall make adjustments for late deposits, checks returned
for insufficient funds and other similar transactions occurring on or after July
1, 1996 as shall be reasonable under the circumstances consistent with the
purpose and intent of this Agreement; and (v) the net balance due to the Safety
Business or the New Xxxxxx Businesses, as the case may be, in respect of the
aggregate amounts of clauses (i) through (iv) shall be paid by New Xxxxxx or
Safety, as appropriate, as promptly as practicable following each month end. For
purposes of this Section 2.01(c), the parties contemplate that the Safety
Business, including but not limited to the administration of accounts payable
and accounts receivable, will be conducted in the normal course consistent with
the covenants contained in Section 7.1 of the Combination Agreement and that the
Safety Business will not be charged for general administrative services provided
by the Corporate Operations, including legal, tax compliance, risk management
and other similar corporate services, in a manner consistent with the Company's
practice in preparing the audited
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balance sheet of the Safety Business dated as of June 30, 1996. All transactions
contemplated by this Section 2.01(c) shall be subject to review by the parties,
and any dispute thereunder shall be resolved by Ernst & Young LLP (or another
"Big Six" accounting firm acceptable to the parties), whose decision shall be
final and unappealable.
(d) Consents. Each of the Company and New Xxxxxx agrees that it shall
use reasonable efforts to obtain, prior to the Distribution Date, all necessary
consents, waivers or amendments to each bank credit agreement, debt security or
other financing facility to which it or its respective subsidiaries is a party
or by which it or any of its respective subsidiaries is bound, or to refinance
such agreement, security or facility, in each case on terms satisfactory to the
Company and New Xxxxxx and to the extent necessary to permit the Distribution to
be consummated without any material breach of the terms of such agreement,
security or facility. To the extent Safety determines, in its reasonable
judgment, that such consents, waivers or amendments would reasonably be expected
to create Safety Liabilities, such terms shall also be reasonably satisfactory
to Safety. From the date hereof until there no longer remain any such material
consents, waivers or amendments to be obtained in connection with the
Distribution pursuant to the terms of this Agreement and the Ancillary
Agreements, New Xxxxxx shall inform Safety regularly, but not less than on a
monthly basis, of its progress in obtaining such consents, waivers and
amendments.
(e) Intercompany Accounts. All agreements, contracts, arrangements and
commitments between the New Xxxxxx Businesses, on the one hand, and the Safety
Business, on the other hand, entered into prior to the Distribution Date for the
purchase or sale of goods or services ("Intercompany Arrangements"), which
intercompany arrangements shall be subject to the reasonable approval of a
senior executive of the Safety Business, shall remain in effect on and after the
Closing Date. All amounts under such Intercompany Arrangements which are
unbilled as of the Distribution Date shall be billed and payable on and after
the Distribution Date in accordance with the terms thereof. Subject to Sections
2.01(c) and 2.10 of this Agreement, on or before the Distribution Date, the
Company shall cause all intercompany indebtedness (which shall include payables
and receivables but which shall not include unbilled amounts under Intercompany
Arrangements) between the New Xxxxxx Businesses, on the one hand, and the Safety
Business, on the other hand, to be settled or otherwise eliminated.
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(f) Cash Management and Intercompany Accounts After the Distribution
Date. The Company and New Xxxxxx shall establish and maintain a separate cash
management system and accounting records with respect to the New Xxxxxx
Businesses effective as of immediately prior to the Distribution Date;
thereafter, (i) any payments by the Company or a Remaining Subsidiary to or on
behalf of New Xxxxxx or a New Xxxxxx Subsidiary or otherwise, in connection with
the New Xxxxxx Businesses or the New Xxxxxx Employees (including, without
limitation, any such payments in respect of New Xxxxxx Liabilities) shall be
recorded in the accounts of New Xxxxxx as a payable to the Company from New
Xxxxxx; any payments by New Xxxxxx or a New Xxxxxx Subsidiary to or on behalf of
the Company or a Remaining Subsidiary or otherwise, in connection with the
Safety Business or in connection with Safety Employees (including, without
limitation, any such payments in respect of Safety Liabilities) shall be
recorded in the accounts of the Company as a payable to New Xxxxxx from the
Company; (ii) other than xxxxx checking and cash accounts with respect to the
Safety Business not maintained, in the ordinary course of business, on the
central Company cash management system, and the accounts listed on Schedule
1.01(a), which xxxxx cash, checking and other accounts (but not the balances
therein, except as provided by Section 2.01(c) and the definition of Safety
Assets) the Company shall retain, New Xxxxxx shall be entitled to all domestic
and international cash bank balances and short-term investments as of the
Distribution Date per the books of the Company (other than cash which
constitutes a Safety Asset) including, without limitation, such cash balances
(other than cash which constitutes a Safety Asset) representing deposited checks
or drafts for which only a provisional credit has been allowed, in the
depository accounts of the Company or any of its subsidiaries; any such cash
balances as of the Distribution Date which have not been transferred to New
Xxxxxx shall be recorded as a payable to New Xxxxxx from Safety in the accounts
of Safety; (iii) New Xxxxxx and the Company shall make adjustments for late
deposits, checks returned for not sufficient funds and other post-Distribution
Date transactions as shall be reasonable under the circumstances consistent with
the purpose and intent of this Agreement; and (iv) the net balance due to the
Company or New Xxxxxx, as the case may be, in respect of the aggregate amounts
of clauses (i), (ii) and (iii) shall be paid by New Xxxxxx or Safety, as
appropriate, as promptly as practicable. For purposes of this Section 2.01(f),
the parties contemplate that the Safety Business and the New Xxxxxx Businesses,
including but not limited to the administration of accounts payable and accounts
receivable, will be conducted in the normal course. All transactions
contemplated in this Section 2.01(f) shall be subject to review by the parties,
and any dispute thereunder shall be resolved by Ernst & Young LLP (or
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another "Big Six" accounting firm acceptable to the parties), whose decision
shall be final and unappealable.
Section 2.02 Transfer of New Xxxxxx Assets. The Company shall transfer
to New Xxxxxx or, at New Xxxxxx'x option, to a New Xxxxxx Subsidiary effective
as of the Distribution Date all of the Company's right, title and interest in
the New Xxxxxx Assets.
Section 2.03 Transfers Not Effected Prior to the Distribution;
Transfers Deemed Effective as of the Distribution Date. To the extent that any
transfers contemplated by this Article II shall not have been consummated on the
Distribution Date, the parties shall cooperate to effect such transfers as
promptly following the Distribution Date as shall be practicable. Nothing herein
shall be deemed to require the transfer of any Assets or the assumption of any
Liabilities which by their terms or operation of law cannot be transferred or
assumed; provided, however, that the Company and New Xxxxxx and their respective
subsidiaries shall cooperate to seek to obtain any necessary consents or
approvals for the transfer of all Assets and Liabilities contemplated to be
transferred pursuant to this Article II. In the event that any such transfer of
Assets or Liabilities has not been consummated, effective as of and after the
Distribution Date, the party retaining such Asset or Liability shall thereafter
hold such Asset in trust for the use and benefit of the party entitled thereto
(at the expense of the party entitled thereto) and retain such Liability for the
account of the party by whom such Liability is to be assumed pursuant hereto,
and take such other action as may be reasonably requested by the party to which
such Asset is to be transferred, or by whom such Liability is to be assumed, as
the case may be, in order to place such party, insofar as reasonably possible,
in the same position as would have existed had such Asset or Liability been
transferred as contemplated hereby. As and when any such Asset or Liability
becomes transferable, such transfer shall be effected forthwith. The parties
agree that, as of the Distribution Date, each party hereto shall be deemed to
have acquired complete and sole beneficial ownership over all of the Assets,
together with all rights, powers and privileges incident thereto, and shall be
deemed to have assumed in accordance with the terms of this Agreement all of the
Liabilities, and all duties, obligations and responsibilities incident thereto,
which such party is entitled to acquire or required to assume pursuant to the
terms of this Agreement.
Section 2.04 No Representations or Warranties; Consents. Except as
otherwise contemplated in Section 2.06 or in connection with any Conveyancing
and Assumption Instruments
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related to real estate, as to which the Company shall transfer to New Xxxxxx
with "special warranty" or equivalent deeds, each of the parties hereto
understands and agrees that no party hereto is, in this Agreement or in any
other agreement or document contemplated by this Agreement or otherwise,
representing or warranting in any way (i) as to the value or freedom from
encumbrance of, or any other matter concerning, any Assets of such party or (ii)
as to the legal sufficiency to convey title to any Asset of the execution,
delivery and filing of this Agreement or any Ancillary Agreement, including,
without limitation, any Conveyancing and Assumption Instruments. It is also
agreed and understood that all Assets either transferred to or retained by the
parties, as the case may be, shall be "as is, where is" and that the party to
which such Assets are to be transferred hereunder shall bear the economic and
legal risk that any conveyances of such Assets shall prove to be insufficient or
that such party's or any of its subsidiaries' title to any such Assets shall be
other than good and marketable and free from encumbrances. The parties shall use
their best efforts to obtain all consents and approvals, to enter into all
amendatory agreements and to make all filings and applications which may be
required for the consummation of the transactions contemplated by this
Agreement, including, without limitation, all applicable regulatory filings or
consents under federal, state or foreign environmental laws.
Section 2.05 Assumption and Satisfaction of New Xxxxxx Liabilities;
Retention of Safety Liabilities. Except as set forth in the Benefits Agreement
or the Tax Sharing Agreement, effective as of and after the Distribution Date,
(a) New Xxxxxx shall, or shall cause its subsidiaries to, assume, pay, perform,
and discharge in due course all of the New Xxxxxx Liabilities and (b) Safety
shall, or shall cause its subsidiaries to, pay, perform and discharge in due
course all of the Safety Liabilities.
Section 2.06 Financial Representations and Warranties. New Xxxxxx
hereby represents and warrants to the Company that:
(a) Safety Assets. The Safety Assets as of the Distribution Date shall
include all Assets then owned or held by the Company and its subsidiaries which
are exclusively used in the operation of the Safety Business as such business is
conducted as of such date, including cash and cash equivalents as provided in
clauses (g) and (h) of the definition of Safety Assets.
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(b) Financial Liabilities. The interest-bearing indebtedness
(excluding hedging or similar contracts and letters or lines of credit in the
ordinary course) of the Safety Business as of the Distribution Date will not
exceed $750,000,000 plus the outstanding amount of the municipal financing, not
to exceed $1,100,000.
The representations contained in this Section 2.06 shall survive the
Distribution Date until March 31, 1998.
Section 2.07 Conveyancing and Assumption Instruments. In connection
with the transfers of Assets other than capital stock and the assumptions of
Liabilities contemplated by this Agreement, the parties shall execute or cause
to be executed by the appropriate entities the Conveyancing and Assumption
Instruments in such forms as the parties shall reasonably agree, including the
transfer of real property with special warranty or equivalent deeds. The
transfer of capital stock shall be effected by means of delivery of stock
certificates and executed stock powers and notation in the stock record books of
the corporation or other legal entities involved and, to the extent required by
applicable law, by notation on public registries.
Section 2.08 Certificate of Incorporation; By-laws; Share Purchase
Rights Plan. Prior to the Distribution Date, the Company and New Xxxxxx shall
take all action necessary so that, at the Distribution Date, the New Xxxxxx
Charter, the New Xxxxxx By-laws and the Rights Agreement shall be in effect,
with such changes as New Xxxxxx may approve.
Section 2.09 New Xxxxxx Capitalization. Prior to the Distribution
Date, the Company and New Xxxxxx shall take all steps necessary to increase the
outstanding shares of New Xxxxxx Common Stock so that, except as otherwise
contemplated by this Agreement or the Benefits Agreement, immediately prior to
the Distribution Date the number of shares of New Xxxxxx Common Stock
outstanding and held by the Company shall equal the number of shares of Company
Common Stock outstanding on the Distribution Record Date.
Section 2.10 Certain Pre-Distribution Transactions. (a) Prior to the
Distribution, the Company shall use its reasonable best efforts to form a
registered German limited liability corporation (GmbH) ("Safety GmbH"). Prior to
the Distribution, Safety GmbH shall purchase or assume, and the Company shall
cause Xxxxxx International GmbH ("Xxxxxx GmbH"), a limited liability corporation
under the laws of Germany, to sell or assign, the Safety Assets and Safety
Liabilities owned or held by Xxxxxx GmbH for the fair market value thereof,
which
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amount shall be determined by mutual agreement of the Company and New Xxxxxx.
The Safety Supplemental Distribution shall be reduced by the amount of any such
cash payment, with any such cash payment in excess of such amount to be credited
against the New Xxxxxx Capital Contribution.
(b) Prior to the Distribution Date, Xxxxxx Manufacturing B.V., a
limited liability corporation under the laws of the Netherlands ("Safety B.V."),
shall repay in cash intercompany indebtedness owed by Safety B.V. to each of
Xxxxxx International B.V. and Xxxxxx Service B.V. ("Xxxxxx B.V."), each a
limited liability corporation under the laws of the Netherlands, with such
repayment funded by an intercompany loan from the Safety Business pursuant to
its borrowing under the Safety Credit Agreement. After such repayment and prior
to the Distribution, Xxxxxx B.V. shall transfer to the Company all of the
outstanding capital stock of Safety B.V. as a distribution in respect of the
shares of Xxxxxx B.V. held by the Company. Any such cash payments by Safety B.V.
to repay such intercompany indebtedness, up to $51,648,000 (representing the
amount of such intercompany indebtedness as of June 30, 1996), shall be credited
against the New Xxxxxx Capital Contribution.
ARTICLE III
THE DISTRIBUTION
Section 3.01 Cooperation Prior to the Distribution. Subject to the
terms of the Combination Agreement, the Company and New Xxxxxx shall take the
following actions:
(a) the Company and New Xxxxxx shall prepare, and the Company shall
mail to the holders of shares of Company Common Stock as of the Special
Meeting Record Date, the Proxy Statement, which shall set forth appropriate
disclosure concerning Newco, Autoliv, the Company, New Xxxxxx, Safety, the
Merger, the Distribution, the Transactions and other matters. The Company
and New Xxxxxx shall also prepare, and New Xxxxxx shall file with the
Commission, the Form S-4, which shall include the Proxy Statement. The
Company and New Xxxxxx shall use their best efforts to cause the Form S-4
to become effective under the Securities Act;
(b) the Company and New Xxxxxx shall cooperate in preparing, filing
with the Commission and causing to become effective any registration
statements or amendments thereof which are appropriate to reflect the
establishment
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of, or amendments to, any employee benefit and other plans contemplated by
the Combination Agreement, the Benefits Agreement or this Agreement;
(c) the Company and New Xxxxxx shall take all such action as may be
necessary or appropriate under the securities or blue sky laws of states or
other political subdivisions of the United States in connection with the
transactions contemplated by this Agreement and the Ancillary Agreements;
(d) the Company and New Xxxxxx shall prepare, and New Xxxxxx shall
file and seek to make effective, subject to official notice of issuance, an
application to permit the listing of New Xxxxxx Common Stock on the NYSE;
and
(e) the Company and New Xxxxxx shall use their best efforts to obtain
the rulings contemplated by the Ruling Request in form and substance
satisfactory to the Company Board as advised by counsel.
Section 3.02 Company Board Action; Distribution Procedures. Subject to
the terms of the Combination Agreement, and the satisfaction or waiver of the
conditions set forth in Section 3.03 hereof, the Company Board shall, in its
discretion, establish the Distribution Record Date and the Distribution Date and
any appropriate procedures in connection with the Distribution. Prior to the
Distribution Date, the Company shall enter into an agreement with the Agent
providing for, among other things, the payment of the Distribution to the
holders of Company Common Stock in accordance with this Article III.
Section 3.03 Conditions Precedent to the Distribution. In no event
shall the Distribution occur (a) if at the Distribution Date the Ruling Request
shall not have been granted in form and substance satisfactory to the Company in
its sole discretion and be in full force and effect, or (b) prior to such time
as the following conditions shall have been satisfied or, to the extent
permitted, waived:
(i) all third party consents and governmental approvals required in
connection with the transactions contemplated hereby shall have been
received, except where the failure to obtain such consents or approvals
would not have a material adverse effect on either (i) the ability of the
parties to consummate the transactions contemplated by this Agreement or
(ii) the business, financial condition or results of operations of Safety
or New Xxxxxx;
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(ii) the Distribution, the Combination Agreement and the related
transactions (including the Merger) shall have been approved by the holders
of a majority of the outstanding shares of Company Common Stock at the
Special Meeting;
(iii) the transactions contemplated by Sections 2.01, 2.02, 2.05,
2.08, 2.09 and 2.10 shall have been consummated in all material respects,
to the extent required to be consummated prior to the Distribution;
(iv) the New Xxxxxx Common Stock shall have been authorized for
listing on the NYSE, subject to official notice of issuance;
(v) the New Xxxxxx Board, composed as contemplated by Section 6.01,
shall have been elected by the Company, as sole stockholder of New Xxxxxx;
(vi) the Form S-4 shall have been declared effective under the
Securities Act by the Commission and no stop order suspending the
effectiveness of the Form S-4 shall have been issued by the Commission and,
to the knowledge of the Company and New Xxxxxx, no proceeding for that
purpose shall have been instituted by the Commission;
(vii) the applicable parties shall have entered into each of the
Ancillary Agreements;
(viii) each condition to the Closing of the Merger and the Exchange
Offer set forth in Article IX of the Combination Agreement, other than with
respect to consummation of the Distribution and the transactions set forth
in Article II hereof, shall have been fulfilled or waived by the party for
whose benefit such condition exists;
(ix) the Company Board shall be reasonably satisfied that, after
giving effect to the transactions set forth in Article II hereof, (A) the
Company will not be insolvent and will not have unreasonably small capital
with which to engage in its businesses and (B) the Company's surplus would
be sufficient to permit the Distribution without violation of Section
23-1-28-3 of the Indiana Business Corporation Law; and
(x) the representations and warranties contained in Section 2.06 shall
be true and correct.
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Neither the Company nor New Xxxxxx shall waive any condition contained in this
Section 3.03 without the consent of Autoliv, which consent shall not be
unreasonably withheld.
Section 3.04 The Distribution. On the Distribution Date, subject to
the conditions and rights of termination set forth in this Agreement, the
Company shall deliver to the Agent a share certificate representing all of the
then outstanding shares of New Xxxxxx Common Stock owned by the Company and
shall instruct the Agent to distribute, on or as soon as practicable following
the Distribution Date, such New Xxxxxx Common Stock to holders of record of
shares of Company Common Stock on the Distribution Record Date. New Xxxxxx
agrees to provide all share certificates and any information that the Agent
shall require in order to effect the Distribution. All shares of New Xxxxxx
Common Stock issued in the Distribution shall be duly authorized, validly
issued, fully paid and nonassessable.
ARTICLE IV
SERVICES
Section 4.01 Provision of Management Services. From the Distribution
Date through not later than the first anniversary thereof (the "Services
Period"), New Xxxxxx shall make available to Safety the following services
(collectively, the "Services"):
(a) Legal, tax, accounting, patent and other intellectual property,
payroll and payroll tax, real estate, human resources (including pension
administration), environmental, corporate secretarial, insurance, treasury
and management information services, in each case including reasonable
access to New Xxxxxx'x systems and resources; and
(b) Such other personnel of New Xxxxxx whose services the parties
agree would be necessary and desirable to permit Safety and its
subsidiaries to operate its business in the ordinary course and to
facilitate the orderly transition of Safety and Newco to an independent and
self-sufficient company in a reasonable and timely manner.
It is understood that Services provided to Safety and its subsidiaries
hereunder will be performed by those employees of New Xxxxxx who perform
equivalent services for New Xxxxxx in the normal course of their employment.
Accordingly, New Xxxxxx shall not be obligated to make available any services to
the
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extent that doing so would unreasonably interfere with the performance by any
New Xxxxxx Employee of services for New Xxxxxx or otherwise cause unreasonable
burden to New Xxxxxx, in light of the purposes of this Agreement.
Notwithstanding the other provisions of this Article IV to the contrary, Safety
shall be obligated to obtain from New Xxxxxx, and New Xxxxxx shall agree to
provide to Safety, Services related to the preparation, filing and auditing of
tax returns for periods ended on or before the Distribution Date, subject to the
provisions of the Tax Sharing Agreement.
Section 4.02 Fee for Services; Expenses. Subject to applicable law,
Safety shall pay for all Services provided under Section 4.01 of this Agreement
(including tax, audit, employee benefits and other Services contemplated to be
provided by the Tax Sharing Agreement or the Benefits Agreement) pursuant to the
formula set forth on Schedule 4.02 or as otherwise agreed by the parties,
together with reimbursement of out-of-pocket expenses. Such payments shall be
due and payable by Safety 30 days after receipt of invoices therefor.
Section 4.03 Independent Contractor Status. New Xxxxxx shall render
and perform the Services as an independent contractor in accordance with its own
standards, subject to its compliance with the provisions of this Agreement and
with all applicable laws, ordinances and regulations.
Section 4.04 Disclaimer; Limited Liability.
(a) New Xxxxxx makes no express or implied representations,
warranties, or guarantees relating to the Services or the quality or results of
Services to be performed under this Agreement; provided, however, that New
Xxxxxx shall use reasonable efforts to provide the Services in a manner at least
comparable to the quality of such services provided to the Safety Business as of
and prior to the date hereof in all material respects.
(b) New Xxxxxx shall not be liable to Safety for any expense, claim
(for malpractice or otherwise), loss or damage, including, without limitation,
indirect, special, consequential or exemplary damages in performing the Services
pursuant to this Article IV; provided, however, that this Section 4.04(b) shall
not apply to any expense, claim (for malpractice or otherwise), loss or damage
resulting from the failure of New Xxxxxx to comply with the covenant contained
in the proviso in paragraph (a) above.
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(c) New Xxxxxx shall not be liable to Safety for the consequences of
any failure or delay to perform any of its obligations under this Agreement
other than for damages arising from New Xxxxxx'x willful or reckless misconduct;
provided, that it shall provide reasonably prompt notice to Safety of such
inability and the reasons therefor.
ARTICLE V
INDEMNIFICATION
Section 5.01 Indemnification by Safety.
(a) Except with respect to the matters governed by the indemnification
provisions set forth in the Tax Sharing Agreement (which shall be governed by
those provisions), Safety shall indemnify, defend and hold harmless New Xxxxxx,
each of its directors, officers, employees and agents and each Affiliate of New
Xxxxxx and each of the heirs, executors, successors and assigns of any of the
foregoing (the "New Xxxxxx Indemnitees") from and against the Safety Liabilities
and any and all losses, claims and Liabilities (including, without limitation,
the costs and expenses of any and all Actions, threatened Actions, demands,
assessments, judgments, settlements and compromises relating thereto and
attorneys' fees and any and all expenses whatsoever reasonably incurred in
investigating, preparing or defending against any such Actions or threatened
Actions) (collectively, "Indemnifiable Losses" and, individually, an
"Indemnifiable Loss") of the New Xxxxxx Indemnitees arising out of or due to the
failure or alleged failure of Safety or any of its Affiliates to pay, perform or
otherwise discharge in due course any of the Safety Liabilities.
(b) Safety shall indemnify, defend and hold harmless each of the New
Xxxxxx Indemnitees from and against any and all Indemnifiable Losses of the New
Xxxxxx Indemnitees arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in any portion of the Proxy
Statement (including any preliminary filings related thereto or any amendments
thereof) to be supplied by, or containing information relating to, Autoliv or
its subsidiaries, or the omission or alleged omission to state in any such
portion a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they were
made, not misleading.
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Section 5.02 Indemnification by New Xxxxxx.
(a) Except with respect to the matters governed by the indemnification
provisions set forth in the Tax Sharing Agreement (which shall be governed by
those provisions), New Xxxxxx shall indemnify, defend and hold harmless each of
the Company and Newco, each of the directors, officers, employees and agents of
each of the Company and Newco and each Affiliate of each of the Company and
Newco and each of the heirs, executors, successors and assigns of any of the
foregoing (the "Safety Indemnitees") from and against the New Xxxxxx Liabilities
and any and all Indemnifiable Losses of the Safety Indemnitees arising out of or
due to the failure or alleged failure of New Xxxxxx or any of its Affiliates to
pay, perform or otherwise discharge in due course any of the New Xxxxxx
Liabilities.
(b) New Xxxxxx shall indemnify, defend and hold harmless each of the
Safety Indemnitees from and against any and all Indemnifiable Losses of the
Safety Indemnitees arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in any portion of the Proxy
Statement (including any preliminary filing related thereto or any amendments
thereof) to be supplied by, or containing information relating to, any of New
Xxxxxx, the New Xxxxxx Subsidiaries or Safety, or the omission or alleged
omission to state in any such portion a material fact required to be stated
therein or necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
Section 5.03 Limitations on Indemnification Obligations.
(a) Insurance Proceeds. The amount which any party (an "Indemnifying
Party") is or may be required to pay to any other party (an "Indemnitee")
pursuant to Section 5.01 or Section 5.02 shall be reduced (including, without
limitation, retroactively) by any Insurance Proceeds or other amounts actually
recovered by or on behalf of such Indemnitee, in reduction of the related
Indemnifiable Loss. If an Indemnitee shall have received the payment required by
this Agreement from an Indemnifying Party in respect of an Indemnifiable Loss
and shall subsequently actually receive Insurance Proceeds or other amounts in
respect of such Indemnifiable Loss, then such Indemnitee shall pay to such
Indemnifying Party a sum equal to the amount of such Insurance Proceeds or other
amounts actually received.
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(b) Foreign Currency Adjustments. In the event that any
indemnification payment required to be made hereunder or under any Ancillary
Agreement shall be denominated in a currency other than United States dollars,
the amount of such payment shall be translated into United States dollars using
the Foreign Exchange Rate for such currency determined in accordance with the
following rules:
(i) with respect to an Indemnifiable Loss arising from payment by a
financial institution under a guarantee, comfort letter, letter of credit,
foreign exchange contract or similar instrument, the Foreign Exchange Rate
for such currency shall be determined as of the date on which such
financial institution shall have been reimbursed;
(ii) with respect to an Indemnifiable Loss covered by insurance, the
Foreign Exchange Rate for such currency shall be the Foreign Exchange Rate
employed by the insurance company providing such insurance in settling such
Indemnifiable Loss with the Indemnifying Party; and
(iii) with respect to an Indemnifiable Loss not covered by clause (i)
or (ii) above, the indemnification payment shall be paid in the applicable
local currency without any translation into United States dollars.
Section 5.04 Procedure for Indemnification.
(a) If an Indemnitee shall receive notice or otherwise learn of the
assertion by a person (including, without limitation, any governmental entity)
who is not a party to this Agreement or to any of the Ancillary Agreements of
any claim or of the commencement by any such person of any Action (a "Third
Party Claim") with respect to which an Indemnifying Party may be obligated to
provide indemnification pursuant to this Agreement, such Indemnitee shall give
such Indemnifying Party written notice thereof promptly after becoming aware of
such Third Party Claim; provided, that the failure of any Indemnitee to give
notice as provided in this Section 5.04 (the "Notice") shall not relieve the
related Indemnifying Party of its obligations under this Article V, except to
the extent that such Indemnifying Party is prejudiced by such failure to give
Notice. Such Notice shall describe the Third Party Claim in reasonable detail,
and shall indicate the amount (to the extent practicable) of the Indemnifiable
Loss that has been or may be sustained by such Indemnitee.
(b) An Indemnifying Party may elect to defend or to seek to settle or
compromise, at such Indemnifying Party's own expense and by such Indemnifying
Party's own counsel, any Third
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Party Claim by delivering to the Indemnitee, within 30 days of receipt of Notice
(or sooner (but in no event less than 10 days after the receipt of Notice), if
the nature of such Third Party Claim so requires), the written acknowledgment
(the "Acknowledgment") of its indemnification obligation under this Agreement
with respect to the Third Party Claim. The Acknowledgment may specify
reservations and exceptions to the extent reasonably acceptable to the
Indemnitee or consistent with the terms of this Agreement and the Ancillary
Agreements, and such Indemnitee shall cooperate in the defense or settlement or
compromise of such Third Party Claim. If the Indemnifying Party elects to assume
responsibility for defending such Third Party Claim, the Indemnifying Party
shall also notify the claimant or plaintiff asserting such Third Party Claim of
such election and request that all communications in relation to the Third Party
Claim be made, delivered or addressed to the Indemnifying Party, instead of the
Indemnitee. If it is later determined that the defendants to the Third Party
Claim include both the Indemnifying Party and the Indemnitee, the Indemnitee
shall thereupon notify the claimant or plaintiff asserting such Third Party
Claim that all communications in relation to the Third Party Claim should also
be made, delivered or addressed to the Indemnitee. After notice from an
Indemnifying Party to an Indemnitee of its election to assume the defense of a
Third Party Claim, such Indemnifying Party shall not be liable to such
Indemnitee under this Article V for any legal or other expenses (except expenses
approved in advance by the Indemnifying Party) subsequently incurred by such
Indemnitee in connection with the defense thereof; provided, that, if the
defendants in any such claim include both the Indemnifying Party and one or more
Indemnitees and in such Indemnitees' reasonable judgment a conflict of interest
between such Indemnitees and such Indemnifying Party exists in respect of such
claim or if the Indemnifying Party shall assume responsibility for such claim
with such reservations or exceptions to the extent reasonably acceptable to the
Indemnitee or consistent with the terms of this Agreement and the Ancillary
Agreements, such Indemnitees shall have the right to employ separate counsel to
represent such Indemnitees and in that event the reasonable fees and expenses of
such separate counsel (but not more than one separate counsel reasonably
satisfactory to the Indemnifying Party) shall be paid by such Indemnifying
Party.
If an Indemnifying Party elects not to assume responsibility for
defending a Third Party Claim (which election may be made only in the event of a
good faith dispute that a claim was inappropriately tendered under Section 5.01
or 5.02, as the case may be) such Indemnitee may defend or (subject to the
following sentence) seek to compromise or settle such Third Party Claim.
Notwithstanding the foregoing, an Indemnitee may not
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settle or compromise any claim without prior written notice to the Indemnifying
Party, which shall have the option within ten days following the receipt of such
notice (i) to disapprove the settlement and assume all past and future
responsibility for the claim, including reimbursing the Indemnitee for prior
expenditures in connection with the claim, or (ii) to disapprove the settlement
and continue to refrain from participation in the defense of the claim, in which
event the Indemnifying Party shall have no further right to contest the amount
or reasonableness of the settlement if the Indemnitee elects to proceed
therewith, or (iii) to approve the amount of the settlement, reserving the
Indemnifying Party's right to contest the Indemnitee's right to indemnity, or
(iv) to approve and agree to pay the settlement. In the event the Indemnifying
Party makes no response to such written notice from the Indemnitee, the
Indemnifying Party shall be deemed to have elected option (ii).
(c) If an Indemnifying Party chooses to defend or to seek to
compromise any Third Party Claim, the related Indemnitee shall make available to
such Indemnifying Party any personnel or any books, records or other documents
within its control or which it otherwise has the ability to make available that
are necessary or appropriate for such defense.
(d) Notwithstanding anything else in this Section 5.04 to the
contrary, an Indemnifying Party shall not settle or compromise any Third Party
Claim unless such settlement or compromise contemplates as an unconditional term
thereof the giving by the claimant or plaintiff asserting such Third Party Claim
to the Indemnitee of a written release from all liability in respect of such
Third Party Claim. In the event the Indemnitee shall notify the Indemnifying
Party in writing that such Indemnitee declines to accept any such settlement or
compromise, such Indemnitee may continue to contest such Third Party Claim, free
of any participation by such Indemnifying Party, at such Indemnitee's sole
expense. In such event, the obligation of such Indemnifying Party to such
Indemnitee with respect to such Third Party Claim shall be equal to (i) the
costs and expenses of such Indemnitee prior to the date such Indemnifying Party
notifies such Indemnitee of the offer to settle or compromise (to the extent
such costs and expenses are otherwise indemnifiable hereunder) plus (ii) the
lesser of (A) the amount of any offer of settlement or compromise which such
Indemnitee declined to accept and (B) the actual out-of-pocket amount such
Indemnitee is obligated to pay subsequent to such date as a result of such
Indemnitee's continuing to pursue such Third Party Claim.
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(e) Any claim on account of an Indemnifiable Loss which does not
result from a Third Party Claim shall be asserted by written notice given by the
Indemnitee to the related Indemnifying Party. Such Indemnifying Party shall have
a period of 30 days after the receipt of such notice within which to respond
thereto. If such Indemnifying Party does not respond within such 30-day period,
such Indemnifying Party shall be deemed to have refused to accept responsibility
to make payment. If such Indemnifying Party does not respond within such 30-day
period or rejects such claim in whole or in part, such Indemnitee shall be free
to pursue such remedies as may be available to such party, under applicable law
or under this Agreement.
(f) In addition to any adjustments required pursuant to Section 5.03,
if the amount of any Indemnifiable Loss shall, at any time subsequent to the
payment required by this Agreement, be reduced by recovery, settlement or
otherwise, the amount of such reduction, less any expenses incurred in
connection therewith, shall promptly be repaid by the Indemnitee to the
Indemnifying Party.
(g) In the event of payment by an Indemnifying Party to any Indemnitee
in connection with any Third Party Claim, such Indemnifying Party shall 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. Such Indemnitee shall 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.
(h) In the event Safety shall determine in its reasonable judgment
that it is likely that it will be named as a potentially responsible party in
any Superfund or other environmental litigation or investigation with respect to
a New Xxxxxx Liability, if requested to do so by Safety, New Xxxxxx shall notify
the potential claimant(s) in such potential litigation of its indemnification
obligation in favor of Safety under this Agreement.
Section 5.05 Remedies Cumulative. The remedies provided in this
Article V 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 5.06 Survival of Indemnities. The obligations of New Xxxxxx
and the Company under this Article V, shall
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survive the Distribution Date and the sale or other transfer by it of any Assets
or businesses or the assignment by it of any Liabilities, with respect to any
Indemnifiable Loss of the other related to such Assets, businesses or
Liabilities. Such obligations shall be binding upon the successors and assigns
of the Safety Business or the New Xxxxxx Businesses, as the case may be, and
upon any transferee of all or substantially all of the assets (in one
transaction or a series of related transactions) of the Safety Business or the
New Xxxxxx Businesses, which transferee shall assume in writing such
obligations. If 25% or more of the Assets of the Safety Business or the New
Xxxxxx Businesses, as the case may be, are spun off to the respective
stockholders of Safety or New Xxxxxx, such spun-off entity shall assume in
writing a proportionate share of the indemnity obligation contained herein of
Safety or New Xxxxxx, as the case may be, based upon the relative assets of such
spun-off entity and the remaining assets in its parent, and thereafter Safety or
New Xxxxxx, as the case may be, shall be released from the proportionate share
so assumed. The assumption of obligations of a transferee or spun-off entity
shall not apply with respect to any transaction consummated after the twentieth
anniversary of this Agreement.
Section 5.07 Right of Inquiry.
(a) In the event of a material adverse change after the Distribution
Date in the financial condition of New Xxxxxx or Safety, which change creates a
substantial likelihood that New Xxxxxx or Safety, as the case may be, will not
be able to satisfy or otherwise settle, when due, its indemnification
obligations to Safety or New Xxxxxx, respectively, under this Article V, Safety
or New Xxxxxx, as the case may be, shall have the right, subject to entering
into an agreement with the other party to preserve confidentiality and any
applicable privilege for the benefit of such other party, upon consultation with
such party, to have limited access on reasonable prior notice to such party's
personnel in order to monitor the status of pending and anticipated litigation
and governmental investigations or proceedings for which Safety or New Xxxxxx,
as the case may be, could be contingently liable. Such right of inquiry shall
terminate at such time as there is no longer a substantial likelihood that the
applicable party will not be able to satisfy its indemnification obligations
under this Agreement and the Ancillary Agreements. The reasonable attorneys'
fees and out-of-pocket costs incurred in connection with a party's inquiry
pursuant to this Section 5.07 shall be treated as Indemnifiable Losses pursuant
to this Article V.
(b) In addition to the provisions of paragraph (a) above, each of
Safety and New Xxxxxx shall have the right on an
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annual basis and subject to reasonable prior notice to meet with the General
Counsel of the other party (or such corporate officer or employee designated by
such General Counsel) and receive an oral report, in a forum in which the
requesting party may ask reasonable questions regarding the status of material
pending and threatened litigation and material governmental investigations or
proceedings for which the requesting party may be contingently liable. For the
avoidance of doubt, no such right shall require Safety or New Xxxxxx, as the
case may be, to (i) provide non-public written information, (ii) provide
confidential information, (iii) jeopardize the benefit of any applicable
privilege or (iv) engage in lengthy or burdensome meetings or discussions. In
addition, each of Safety and New Xxxxxx shall have the further right to request
one additional meeting per year in connection with the public disclosure by the
other party during such year of a material adverse development in any pending or
threatened litigation or governmental investigation or proceeding for which the
requesting party may be contingently liable, such meeting otherwise to be on the
same terms as set forth in this Section 5.07(b). Each of Safety and New Xxxxxx
shall bear its own cost of attendance at such meetings, which shall be held at
the corporate offices of the non-requesting party.
ARTICLE VI
CERTAIN ADDITIONAL MATTERS AND COVENANTS
Section 6.01 The New Xxxxxx Board. New Xxxxxx and the Company shall
take all actions which may be required to elect or otherwise appoint, as of the
Distribution Date, each of the directors of the Company Board as a director of
New Xxxxxx.
Section 6.02 Resignations; Safety Board.
(a) The Company shall cause all of its directors and New Xxxxxx
Employees to resign, effective as of the Distribution Date, from all boards of
directors or similar governing bodies of Safety or the Retained Subsidiaries on
which they serve, and from all positions as officers of Safety or the Retained
Subsidiaries in which they serve. The Company shall cause all of the Safety
Employees to resign from all boards of directors or similar governing bodies of
New Xxxxxx or any New Xxxxxx Subsidiary on which they serve, and from all
positions as officers of New Xxxxxx or any New Xxxxxx Subsidiary in which they
serve.
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(b) The Company shall take all actions which may be required to elect
or otherwise appoint to the Company Board and the board of directors of each
Remaining Subsidiary, as of the Effective Time, such officers of Newco or the
Company as the Company may designate prior to the Effective Time.
Section 6.03 Certain Post-Distribution Transactions.
(a) New Xxxxxx. (i) New Xxxxxx shall, and shall cause each New Xxxxxx
Subsidiary to, comply with each representation and statement made, or to be
made, to any taxing authority in connection with any ruling obtained, or to be
obtained, by the Company and New Xxxxxx acting together, from any such taxing
authority with respect to any transaction contemplated by this Agreement.
(ii) Neither New Xxxxxx nor any New Xxxxxx Subsidiary shall for a
period of one year following the Distribution Date engage or agree to engage in
any of the following transactions, unless (X) an opinion in form and substance
reasonably satisfactory to Safety is obtained from nationally recognized tax
counsel to New Xxxxxx and/or (Y) a supplemental ruling is obtained from the IRS,
in either case to the effect that such transaction(s) would not adversely affect
the tax consequences of the contributions, transfers, assumptions, Merger and
Distribution described in Articles II and III of this Agreement to the Company,
any Retained Subsidiary, or any shareholder or former shareholder of the
Company. The transactions subject to this provision are: (A) ceasing to engage
in an active trade or business within the meaning of Section 355(b) of the Code,
whether by means of a disposition or distribution of stock or assets, or
otherwise; (B) repurchasing more than 20% of the New Xxxxxx Common Stock
outstanding immediately after the Distribution; (C) issuing an amount of New
Xxxxxx capital stock that would cause the Distribution to fail to satisfy the
requirement that the Company have been in control of New Xxxxxx within the
meaning of Section 368(c) of the Code immediately prior to the Distribution or
that the New Xxxxxx shareholders be in control of New Xxxxxx immediately after
the Distribution within the meaning of Section 368(a)(1)(D) of the Code; or (D)
liquidating or merging with or into any other entity (including a New Xxxxxx
Subsidiary). New Xxxxxx hereby represents and warrants that neither New Xxxxxx
nor any New Xxxxxx Subsidiary has any plan or intention to undertake any of the
transactions set forth in (A), (B), (C), or (D) above. Notwithstanding the
foregoing, any act or transaction that is consistent with the representations
contained in (x) the request for rulings and any supplement thereto filed with
the IRS in connection with the Distribution or (y) the tax certificates
described in Section 9.1(g)(ii) of the Combination Agreement relating to the
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opinions of counsel to be rendered in connection with the Distribution and
the Merger, shall not be subject to the provisions of this Section 6.03(a)(ii).
(b) The Company. The Company shall, and shall cause each Remaining
Subsidiary to, comply with each representation and statement made, or to be
made, to any taxing authority in connection with any ruling obtained, or to be
obtained, by the Company and New Xxxxxx acting together, from any such taxing
authority with respect to any transaction contemplated by this Agreement.
Section 6.04 Use of Names.
(a) Any existing printed material showing any affiliation or
connection of Safety or the Retained Subsidiaries with New Xxxxxx, including any
names using "Xxxxxx" or a derivative thereof, may be used by Safety or the
Retained Subsidiaries only for a period ending eight months after the
Distribution Date. On and after the Distribution Date, Safety shall not
otherwise represent to third parties that it is presently affiliated with New
Xxxxxx.
(b) From and after the Effective Time, New Xxxxxx shall have all
rights in and use of the names "Xxxxxx" and "Xxxxxx International" and all other
names, marks, scripts, type fonts, forms, styles, logos, designs, devices, trade
dress, symbols and other forms of trade identity constituting New Xxxxxx Assets
(collectively, the "Xxxxxx Name Rights"), and all derivatives thereof. The
Company acknowledges that New Xxxxxx has all such rights and that the Company
will not use the New Xxxxxx Rights, or names, marks or other material
confusingly similar therewith except as permitted by this Agreement. Prior to or
promptly after the Effective Time, the Company shall change its name and the
name of any Subsidiary or other person under its control to eliminate therefrom
the names "Xxxxxx" and "Xxxxxx International" and all derivatives thereof. For a
period of eight months after the Distribution Date, the Company may use the
names "Xxxxxx" and "Xxxxxx International" only to the extent that it is not
practical to change such names or as permitted by Section 6.04(a), including in
connection with any signs, letterhead, business cards, invoices or other printed
forms, telephone directory listings or promotional material, and products in
inventory as of the Distribution Date and shall cause the Company and its
subsidiaries to maintain the same standards of quality with respect to such
names, logos and marks as previously exercised.
(c) Nothing in this Section 6.04 shall obligate Safety to replace any
tooling or other equipment used in the
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manufacturing process, provided that Safety uses all reasonable efforts to
comply with the requirements of paragraphs (a) and (b) with respect to such
tooling and equipment by, for example, affixing labels thereto or providing
other appropriate signage.
(d) As of the date of this Agreement, New Xxxxxx intends to use
"Xxxxxx International, Inc." as its corporate name following the Effective Time,
although nothing herein shall preclude New Xxxxxx from changing such name in the
future.
Section 6.05 Restrictions on Hiring of Other Party's Employees. For a
period of two years after the Distribution Date, each of Safety and New Xxxxxx
agrees that, without the prior written consent of the other, it will not, and it
will cause its Affiliates not to, solicit the employment of or employ any New
Xxxxxx Employee or Safety Employee, respectively.
Section 6.06 Further Assurances; Cooperation. Each of the parties
hereto promptly shall execute such documents and other instruments and take such
further actions as may be reasonably required or desirable to carry out the
provisions hereof and to consummate the transactions contemplated hereby. The
parties shall cooperate with each other in all reasonable respects to ensure the
transfer to New Xxxxxx or a New Xxxxxx Subsidiary of the New Xxxxxx Assets, New
Xxxxxx Liabilities and the businesses related thereto, and the retention by the
Company of the Safety Business, including, without limitation, (i) allocating
rights and obligations under contracts, agreements and other arrangements, if
any, of the Company that relate to both the Safety Business and the New Xxxxxx
Businesses, (ii) determining whether to enter into any service or other sharing
agreements on a mutually acceptable arm's-length basis that may be necessary to
assure a smooth and orderly transition, and (iii) obtaining any reasonably
necessary or appropriate third-party consents, licenses and permits in
connection with the Distribution. In case at any time after the Distribution
Date any further action is necessary or desirable to carry out the purposes of
this Agreement, the proper officers and directors of each party to this
Agreement shall take all such necessary or desirable action.
Section 6.07 Guarantees.
(a) Safety and New Xxxxxx shall cooperate, and shall cause their
respective Affiliates to cooperate, to terminate, or to cause Safety or one of
its Affiliates to be substituted in all respects for New Xxxxxx or its
Affiliates in respect of, all obligations of New Xxxxxx and its Affiliates under
any
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loan, financing, lease, contract, or other obligation in existence as of the
Distribution Date pertaining to the Safety Business for which New Xxxxxx or an
Affiliate of New Xxxxxx may be liable, as guarantor, original tenant, primary
obligor or otherwise. If such a termination or substitution is not effected by
the Distribution Date, (i) Safety shall indemnify and hold harmless the New
Xxxxxx Indemnitees for any Indemnifiable Loss arising from or relating thereto,
and (ii) without the prior written consent of the Chief Financial Officer of New
Xxxxxx, from and after the Distribution Date, Safety shall not, and shall not
permit any of its Affiliates to, renew or extend the term of, increase its
obligations under, or transfer to a third party, any loan, lease, contract or
other obligation for which New Xxxxxx or any of its Affiliates is or may be
liable unless all obligations of New Xxxxxx and its Affiliates with respect
thereto are thereupon terminated by documentation reasonably satisfactory in
form and substance to the Chief Financial Officer of New Xxxxxx.
(b) Safety and New Xxxxxx shall cooperate, and shall cause their
respective Affiliates to cooperate, to terminate, or to cause New Xxxxxx or one
of its Affiliates to be substituted in all respects for Safety and its
Affiliates in respect of, all obligations of Safety and its Affiliates under any
loan, financing, lease, contract or other obligation in existence as of the
Distribution Date pertaining to the New Xxxxxx Businesses for which Safety or
its Affiliates may be liable, as guarantor, original tenant, primary obligor or
otherwise. If such a termination or substitution is not effected by the
Distribution Date, (i) New Xxxxxx shall indemnify and hold harmless the Company
Indemnitees for any Indemnifiable Loss arising from or relating thereto, and
(ii) without the prior written consent of the Chief Financial Officer of Safety
or Newco, from and after the Distribution Date, New Xxxxxx shall not, and shall
not permit any of its Affiliates to, renew or extend the term of, increase its
obligations under, or transfer to a third party, any loan, lease, contract or
other obligation for which Safety or its Affiliates is or may be liable unless
all obligations of Safety and its Affiliates with respect thereto are thereupon
terminated by documentation reasonably satisfactory in form and substance to the
Chief Financial Officer of Safety or Newco.
(c) Safety and New Xxxxxx shall provide Newco with information and
documentation relating to the actions to be taken pursuant to this Section 6.07.
Section 6.08 Shared Facilities. From and after the Distribution Date,
New Xxxxxx shall have access to the facilities specified in Schedule 6.08 on the
terms set forth thereon.
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Section 6.09 Thiokol-Xxxxxx Spinoff. Safety agrees that, at New
Xxxxxx'x request and expense and subject to New Xxxxxx'x obligation to indemnify
Safety for such actions, Safety shall act as agent for New Xxxxxx in making any
claim against Xxxxxx Thiokol, Inc. (now named Thiokol Corporation) in connection
with New Xxxxxx'x indemnification and similar rights pursuant to the agreements
entered into between Thiokol and Xxxxxx International, Inc. in connection with
the 1989 distribution of the capital stock of Xxxxxx International, Inc. Safety
shall not knowingly waive any such rights of New Xxxxxx without New Xxxxxx'x
consent. Notwithstanding the foregoing, Safety shall not be obligated to take
any actions in furtherance of its obligations under this Section 6.09 if Safety
determines, in its reasonable judgment, that taking such actions would entail an
undue level of risk to Safety or involve Safety in a substantial controversy or
dispute.
Section 6.10 Non-Competition. (a) For a period of four years from and
after the Distribution Date, New Xxxxxx will not engage, directly or through any
subsidiary or other entity controlled by New Xxxxxx, in the automotive safety
restraint business (as such business is conducted by Newco and its subsidiaries
immediately following the Effective Time (as defined in the Contribution
Agreement)); provided, however, that this Section 6.10 shall not prevent New
Xxxxxx from:
(i) acquiring no more than 10% of the outstanding stock, partnership
or other equity interests in any corporation, partnership,
limited liability company or other person or entity ("Person");
(ii) acquiring more than 10% of the outstanding capital stock,
partnership or other equity interests in any Person for which the
annual revenues derived from the business of such Person that
competes with the automotive safety restraint business (as such
business is conducted by Newco and its subsidiaries immediately
following the Effective Time) are not more than 10% of such
Person's total annual revenues;
(iii) acquiring more than 50% of the outstanding capital stock,
partnership or other equity interests in any Person (or any
lesser percentage if, pursuant to contractual or other
arrangements, New Xxxxxx has the right to cause such Person to
take the actions specified in the following proviso) for which
the annual revenues derived from the business of such Person that
competes with the automotive safety restraint business (as
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such business is conducted by Newco and its subsidiaries
immediately following the Effective Time) are more than 10% (or,
in the event such revenues represent less than 10% of such
Person's total annual revenues, constitute a stand-alone business
that can be divested without materially affecting the remaining
businesses or operations of such Person) but less than 40% of
such Person's total annual revenues; provided, however, that New
Xxxxxx shall use all commercially reasonable efforts to divest
that portion of such Person that competes with the automotive
safety restraint business (as such business is conducted by Newco
and its subsidiaries immediately following the Effective Time) on
commercially reasonable terms as soon as practicable after
acquisition of such ownership or interest; or
(iv) engaging in any investment activities with respect to any pension
plan, trust for the benefit of employees or retirees, employee
savings or stock ownership plan or other employee benefit,
retirement or welfare plan or program.
(b) Notwithstanding anything to the contrary in Section 6.10(a), for a
period of ten years from and after the Distribution Date, New Xxxxxx will not
engage, directly or through any subsidiary or other entity controlled by New
Xxxxxx, in the automotive safety restraint business using as its trade name any
name containing the words "Xxxxxx" or "MI".
ARTICLE VII
ACCESS TO INFORMATION AND SERVICES
Section 7.01 Provision of Corporate Records.
(a) New Xxxxxx Assets shall include the original corporate minute
books, stock ledgers and certificates and corporate seals of each New Xxxxxx
Subsidiary, all licenses, leases, agreements, litigation files and filings with
foreign governments primarily relating to the New Xxxxxx Businesses and all
other such material that does not relate exclusively to the Safety Business.
Safety shall arrange as soon as practicable following the Distribution Date for
the transportation to New Xxxxxx of existing corporate records in its possession
primarily relating to the New Xxxxxx Businesses, except to the extent such items
are already in the possession of New Xxxxxx or
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a New Xxxxxx Subsidiary or located at the Company's present principal executive
offices or on premises included in the New Xxxxxx Assets. Such records shall be
the property of New Xxxxxx, but shall be available to Safety for review and
duplication and shall otherwise be subject to Section 7.05 of this Agreement.
(b) Safety Assets shall include the original corporate minute books,
stock ledgers and certificates and corporate seals of the Company and the
Retained Subsidiaries and all licenses, leases, agreements, litigation files and
filings exclusively relating to the Safety Business. New Xxxxxx shall arrange as
soon as practicable following the Distribution Date, to the extent not
previously delivered in connection with the transactions contemplated in Article
II, for the transportation to Safety of existing corporate records (excluding
accounting, tax, and financial records and original Policies except as otherwise
agreed by the parties) in its possession or located at the Company's principal
executive offices exclusively relating to Safety and the Retained Subsidiaries,
except to the extent such items are already in the possession of Safety. Such
records shall be the property of Safety, but shall be available to New Xxxxxx
for review and duplication and shall otherwise be subject to Section 7.05 of
this Agreement.
Section 7.02 Access to Information.
(a) From and after the Distribution Date, Safety shall afford to New
Xxxxxx and its authorized accountants, counsel and other designated
representatives reasonable access (including using reasonable efforts to give
access to persons or firms possessing information) and duplicating rights during
normal business hours to all records, books, contracts, instruments, computer
data and other data and information (collectively, "Information") within
Safety's possession insofar as such access is reasonably required by New Xxxxxx,
subject to appropriate restrictions for classified information. Similarly, New
Xxxxxx shall afford to Safety and its authorized accountants, counsel and other
designated representatives reasonable access (including using reasonable efforts
to give access to persons or firms possessing information) and duplicating
rights during normal business hours to Information within New Xxxxxx'x
possession, insofar as such access is reasonably required by Safety. Information
may be requested under this Article VII for, without limitation, audit,
accounting, claims, litigation and tax purposes, as well as for purposes of
fulfilling disclosure and reporting obligations and for performing this
Agreement and the transactions contemplated hereby.
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(b) For a period of five years following the Distribution Date, each
of New Xxxxxx and Safety shall provide to the other, promptly following such
time at which such documents shall be filed with the Commission, all documents
which shall be filed by it or any of its subsidiaries with the Commission
pursuant to the periodic and interim reporting requirements of the Exchange Act
and the rules and regulations of the Commission promulgated thereunder.
(c) In furtherance of the rights and obligations of the parties set
forth in subsections (a) and (b) of this Section 7.02:
(i) Each party hereto acknowledges that (A) each of Safety and the
Retained Subsidiaries (the "Safety Group") on the one hand, and New Xxxxxx
and the New Xxxxxx Subsidiaries (the "New Xxxxxx Group") on the other hand,
has or may obtain Information regarding a member of the other 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 ("Privileged
Information"); (B) there are a number of actual, threatened or future
litigations, investigations, proceedings (including arbitration
proceedings), claims or other legal matters that have been or may be
asserted by or against, or otherwise affect, each or both of Safety and New
Xxxxxx (or members of either Group) ("Litigation Matters"); (C) Safety and
New Xxxxxx have a common legal interest in Litigation Matters, in the
Privileged Information, and in the preservation of the confidential status
of the Privileged Information, in each case relating to the Safety Business
or the New Xxxxxx Businesses as it or they existed prior to the
Distribution Date or relating to or arising in connection with the
relationship between the constituent elements of the Groups on or prior to
the Distribution Date; and (D) the Company, Safety and New Xxxxxx intend
that the transactions contemplated by this Agreement and the Ancillary
Agreements and any transfer of Privileged Information in connection
herewith or therewith shall not operate as a waiver of any potentially
applicable privilege.
(ii) Each of the Company, Safety and New Xxxxxx 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 New Xxxxxx Businesses or the Safety Business as
they or it existed prior to the Distribution
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Date, respectively, or relating to or arising in connection with the
relationship between the Groups on or prior to the Distribution Date,
without providing prompt written notice to and obtaining the prior written
consent of the other, which consent shall not be unreasonably withheld and
shall not be withheld if the other party certifies that such disclosure is
to be made in response to a likely threat of suspension or debarment or
similar action; provided, however, that Safety and New Xxxxxx may make such
disclosure or waiver with respect to Privileged Information if such
Privileged Information relates, in the case of Safety, solely to the Safety
Business as it existed prior to the Distribution Date or, in the case of
New Xxxxxx, solely to the New Xxxxxx Businesses as they existed prior to
the Distribution Date. In the event of a disagreement between any member of
the Safety Group and any member of the New Xxxxxx Group concerning the
reasonableness of withholding such consent, no disclosure shall be made
prior to a final, nonappealable resolution of such disagreement by a court
of competent jurisdiction.
(iii) Upon any member of the Safety Group or any member of the New
Xxxxxx Group receiving any subpoena or other compulsory disclosure notice
from a court, other governmental agency or otherwise which requests
disclosure of Privileged Information, in each case relating to the New
Xxxxxx Businesses or the Safety Business, respectively, as they or it
existed prior to the Distribution Date or relating to or arising in
connection with the relationship between the constituent elements of the
Groups on or prior to the Distribution Date, the recipient of the notice
shall promptly provide to Safety, in the case of receipt by a member of the
New Xxxxxx Group, or New Xxxxxx, in the case of receipt by a member of the
Safety Group, 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
paragraph (ii) above, Safety and New Xxxxxx shall 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 7.03 Production of Witnesses. At all times from and after the
Distribution Date, each of New Xxxxxx and Safety shall use reasonable efforts to
make available to the other upon written request, its and its subsidiaries'
officers,
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directors, employees and agents as witnesses to the extent that such persons may
reasonably be required in connection with any legal, administrative or other
proceedings in which the requesting party may from time to time be involved.
Section 7.04 Reimbursement. Except to the extent otherwise
contemplated by Article IV hereof or any Ancillary Agreement, a party providing
Information or witness services to the other party under this Article VII shall
be entitled to receive from the recipient, upon the presentation of invoices
therefor, payments for such amounts, relating to supplies, disbursements and
other out-of-pocket expenses and direct and indirect costs of employees who are
witnesses, as may be reasonably incurred in providing such Information or
witness services.
Section 7.05 Retention of Records. Except as otherwise required by law
or agreed to in writing, each of Safety and New Xxxxxx may destroy or otherwise
dispose of any of the Information in accordance with the records retention
policy of the Company at the date of this Agreement as set forth on Exhibit F,
provided that, prior to destruction or disposal of Information relating in any
material respect to the New Xxxxxx Business or the Safety Business,
respectively, (a) it shall provide no less than 90 or more than 120 days prior
written notice to the other, specifying in reasonable detail the Information
proposed to be destroyed or disposed of and (b) if a recipient of such notice
shall request in writing prior to the scheduled date for such destruction or
disposal that any of the Information proposed to be destroyed or disposed of be
delivered to such requesting party, the party proposing the destruction or
disposal shall promptly arrange for the delivery of such of the Information as
was requested at the expense of the party requesting such Information.
Section 7.06 Confidentiality. Each of Safety and the Retained
Subsidiaries on the one hand, and New Xxxxxx and the New Xxxxxx Subsidiaries on
the other hand, shall hold, and shall cause its consultants and advisors to
hold, in strict confidence, all Information concerning the other in its
possession or furnished by the other or the other's representatives pursuant to
this Agreement (except to the extent that such Information has been (a) in the
public domain through no fault of such party or (b) later lawfully acquired from
other sources by such party), and each party shall not release or disclose such
Information to any other person, except its auditors, attorneys, financial
advisors, bankers and other consultants and advisors, unless compelled to
disclose by judicial or administrative process or, as advised by its counsel, by
other requirements of law.
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ARTICLE VIII
INSURANCE
Section 8.01 Policies and Rights.
(a) New Xxxxxx Assets. Without limiting the generality of the
definition of New Xxxxxx Assets set forth in Section 1.01 or the effect of
Section 2.02, the New Xxxxxx Assets shall include (i) any and all rights of an
insured party under each of the Company Policies, specifically including rights
of indemnity and the right to be defended by or at the expense of the insurer,
with respect to all injuries, losses, Liabilities, damages and expenses incurred
or claimed to have been incurred prior to the Distribution Date by any party in
or in connection with the conduct of the New Xxxxxx Businesses or, to the extent
any claim is made against New Xxxxxx or any of its subsidiaries, the Safety
Business and which injuries, losses, Liabilities, damages and expenses may arise
out of insured or insurable occurrences or events under one or more of the
Company Policies; provided, however, that nothing in this clause shall be deemed
to constitute (or to reflect) the assignment of the Company Policies, or any of
them, to New Xxxxxx; and (ii) the New Xxxxxx Policies.
(b) Safety Assets. Without limiting the generality of the definition
of Safety Assets set forth in Section 1.01, the Safety Assets shall include (i)
any and all rights of an insured party under each of the Company Policies,
specifically including rights of indemnity and the right to be defended by or at
the expense of the insurer, other than the rights under the Company Policies
included in New Xxxxxx Assets pursuant to Section 8.01(a); and (ii) the Safety
Policies.
(c) No Further Indemnity. Nothing in this Article VIII shall be deemed
to constitute an indemnity of New Xxxxxx by Safety or an indemnity of Safety by
New Xxxxxx.
Section 8.02 Post-Distribution Date Claims. If, subsequent to the
Distribution Date, any person, corporation, firm or entity shall assert a claim
against New Xxxxxx or any New Xxxxxx Subsidiary with respect to any injury,
loss, liability, damage or expense incurred or claimed to have been incurred
prior to the Distribution Date in or in connection with the conduct of the New
Xxxxxx Businesses or, to the extent any claim is made against New Xxxxxx or any
of its subsidiaries, the Safety Business, or any of them, and which injury,
loss, liability, damage or expense may arise out of insured or
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insurable occurrences or events under one or more of the Company Policies, the
Company shall at the time such claim is asserted be deemed to assign, without
need of further documentation, to New Xxxxxx any and all rights of an insured
party under the applicable Company Policy with respect to such asserted claim,
specifically including rights of indemnity and the right to be defended by or at
the expense of the insurer; provided, however, that nothing in this sentence
shall be deemed to constitute (or to reflect) the assignment of the Company
Policies, or any of them, to New Xxxxxx.
Section 8.03 Administration and Reserves.
(a) Notwithstanding the provisions of Article III, from and after the
Distribution Date:
(i) New Xxxxxx shall be responsible for the (A) Insurance
Administration of the Company Policies and the New Xxxxxx Policies, and (B)
Claims Administration with respect to the New Xxxxxx Liabilities; provided,
that the retention of the Company Policies and the New Xxxxxx Policies by
New Xxxxxx is in no way intended to limit, inhibit, or preclude any right
to insurance coverage for any Insured Claim of a named insured under the
Company Policies and the New Xxxxxx Policies, including but not limited to
Safety and any of its operations, subsidiaries and Affiliates;
(ii) Unless otherwise agreed pursuant to Article IV hereof, Safety
shall be responsible for the (A) Insurance Administration of the Safety
Policies and (B) Claims Administration with respect to the Safety
Liabilities; provided that the retention of the Safety Policies by Safety
is in no way intended to limit, inhibit, or preclude any right to insurance
coverage for any Insured Claim of a named insured under the Safety
Policies;
(iii) New Xxxxxx shall be entitled to reserves established by the
Company or any of its subsidiaries, or the benefit of reserves held by any
insurance carrier, with respect to the New Xxxxxx Liabilities; and
(iv) Safety shall be entitled to reserves established by the Company
or any of its subsidiaries, or the benefit of reserves held by any
insurance carrier, with respect to the Safety Liabilities.
(b) Insurance Premiums. New Xxxxxx shall have the right but not the
obligation to pay the premiums, to the extent
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that Safety does not pay premiums with respect to Safety Liabilities
(retrospectively-rated or otherwise), with respect to the Company Policies and
the New Xxxxxx Policies, as required under the terms and conditions of the
respective Policies, whereupon Safety shall forthwith reimburse New Xxxxxx for
that portion of such premiums paid by New Xxxxxx as are attributable to the
Safety Liabilities. Unless otherwise agreed by the parties hereto, Safety shall
purchase (subject to a 50% reimbursement by New Xxxxxx within 15 days of notice
of such purchase) continued coverage under its director and officer liability
insurance policy for claims made prior to the sixth anniversary of the
Distribution Date based upon acts or omissions occurring on or prior to the
Distribution Date.
(c) Allocation of Insurance Proceeds. Insurance Proceeds received with
respect to claims, costs and expenses under the Policies shall be paid to New
Xxxxxx with respect to the New Xxxxxx Liabilities and to Safety with respect to
the Safety Liabilities. Payment of the allocable portions of indemnity costs of
Insurance Proceeds resulting from the Policies will be made to the appropriate
party upon receipt from the insurance carrier. In the event that the aggregate
limits on any Company Policies are exceeded, the parties agree to provide an
equitable allocation of Insurance Proceeds based upon their respective bona fide
claims. The parties agree to use their best efforts to cooperate with respect to
insurance matters.
Section 8.04 Agreement for Waiver of Conflict and Shared Defense. In
the event that Insured Claims of both New Xxxxxx and Safety exist relating to
the same occurrence, New Xxxxxx and Safety agree to jointly defend and to waive
any conflict of interest necessary to the conduct of that joint defense. Nothing
in this paragraph shall 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.
Section 8.05 Cooperation with Respect to Insurance. New Xxxxxx shall
provide all reasonable cooperation in order to assist Safety during the
transition period in obtaining such continuous insurance coverage as Safety
shall request, provided, that New Xxxxxx shall not be obligated to pay any
premiums or other costs in connection therewith.
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ARTICLE IX
MISCELLANEOUS
Section 9.01 Complete Agreement; Construction. This Agreement,
including the Schedules and Exhibits and the Ancillary Agreements and other
agreements and documents referred to herein, shall (to the extent each party
hereto is a party thereto) constitute the entire agreement between the parties
with respect to the subject matter hereof and shall supersede all previous
negotiations, commitments and writings with respect to such subject matter.
Notwithstanding any other provisions in this Agreement to the contrary, in the
event and to the extent that there shall be a conflict between the provisions of
this Agreement (or any Conveyancing and Assumption Instrument or other
instrument of assumption) and the provisions of the Benefits Agreement or the
Tax Sharing Agreement, the provisions of the Benefits Agreement or the Tax
Sharing Agreement, as the case may be, shall control.
Section 9.02 Survival of Agreements. Except as otherwise contemplated
by this Agreement, all covenants and agreements of the parties contained in this
Agreement shall survive the Distribution Date.
Section 9.03 Expenses. Safety Liabilities shall include $15 million of
expenses incurred by the Company in connection with the transactions
contemplated by the Combination Agreement to the extent not previously paid by
Safety prior to the Distribution Date, together with all costs, including
financing costs, and expenses (except as provided in the next succeeding
sentence) in connection with the Safety Credit Agreement, with New Xxxxxx
responsible for any additional expenses incurred by the Company on or prior to
the Distribution Date in connection therewith, including the costs and expenses
incurred by the Company or New Xxxxxx on or prior to the Distribution Date in
connection with the preparation, execution, delivery and implementation of this
Agreement. New Xxxxxx shall be responsible, up to a maximum of $500,000, for
fifty percent of the costs, including financing costs, and expenses incurred in
connection with the Safety Credit Agreement.
Section 9.04 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to the principles of conflicts of laws thereof.
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Section 9.05 Notices. All notices and other communications hereunder
shall be in writing and shall be delivered by hand or mailed by registered or
certified mail (return receipt requested) to the parties at the following
addresses (or at such other addresses for a party as shall be specified by like
notice) and shall be deemed given on the date on which such notice is received:
To the Company or Safety:
[Name to come]
[3350 Airport Road]
[Xxxxx, Xxxx 00000]
Attention: Corporate Secretary
with a copy to:
Autoliv, Inc.
[Address To Come]
Attention: Corporate Secretary
and
Skadden, Arps, Slate, Xxxxxxx & Xxxx
00 Xxxxxxxxxxxx
Xxxxxx XX0X 0XX, Xxxxxxx
Attention: Xxxxx X. Xxxxxxx, Xx., Esq.
To New Xxxxxx or any New Xxxxxx Subsidiary which is a party
hereto:
Xxxxxx International, Inc.
000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Corporate Secretary
with a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
Section 9.06 Amendments. This Agreement may not be modified or amended
except by an agreement in writing signed by the respective duly authorized
representatives of the parties.
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Section 9.07 Successors and Assigns. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
and their respective successors and permitted assigns.
Section 9.08 Counterparts. This Agreement may be executed in any
number of separate counterparts, each such counterpart being deemed to be an
original instrument, and all such counterparts shall together constitute the
same agreement.
Section 9.09 Subsidiaries. Each of the parties hereto shall cause to
be performed, and hereby guarantees the performance of, all actions, agreements
and obligations set forth herein to be performed by any subsidiary of such party
which is contemplated to be a subsidiary of such party on and after the
Distribution Date.
Section 9.10 Third Party Beneficiaries. Except for the provisions of
Article V relating to Indemnitees, which shall be for the benefit of such
Indemnitees, and for Newco, which shall be a third-party beneficiary of the
Company's rights under this Agreement, this Agreement is solely for the benefit
of the parties hereto and their respective subsidiaries and Affiliates and
should not be deemed to confer upon third parties any remedy, claim, Liability,
reimbursement, claim of action or other right in excess of those existing
without reference to this Agreement.
Section 9.11 Titles and Headings. Titles and headings to sections
herein are inserted for the convenience of reference only and are not intended
to be a part of or to affect the meaning or interpretation of this Agreement.
Section 9.12 Exhibits and Schedules. The Exhibits and Schedules shall
be construed with and as an integral part of this Agreement to the same extent
as if the same had been set forth verbatim herein.
Section 9.13 Legal Enforceability. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof. Any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. Without prejudice
to any rights or remedies otherwise available to any party hereto, each party
hereto acknowledges that damages would be an inadequate remedy for any breach of
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the provisions of this Agreement and agrees that the obligations of the parties
hereunder shall be specifically enforceable.
Section 9.14 Consent to Jurisdiction. Each of the parties hereto
irrevocably submits to the exclusive jurisdiction of any state or federal court
in the State of Delaware for the purposes of any suit, action or other
proceeding arising out of this Agreement or any transaction contemplated hereby
(and agrees not to commence any action, suit or proceeding relating hereto
except in such courts). Each of the parties hereto further agrees that service
of any process, summons, notice or document hand delivered or sent by registered
mail to such party's respective address set forth in Section 9.05 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 the parties hereto irrevocably and
unconditionally waives any objection to the laying of venue of any action, suit
or proceeding arising out of this Agreement or the transactions contemplated
hereby in any state or federal court in the State 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.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
XXXXXX INTERNATIONAL, INC.
By: ________________________________
Name:
Title:
NEW XXXXXX INTERNATIONAL, INC.
By: ________________________________
Name:
Title:
